Updated 22 Jan. 2021: On Jan. 12, 2021, Pharos reported having raised $115MM for its Fund IV, filing here. 25 Nov. 2020: Pharos filed today showing roughly $154.3MM now raised for Fund IV-A LP, which focuses on rural healthcare industries and is a certified rural business investment fund (RBIC) that is companion to the firm's Pharos Capital IV LP. On Jan. 13, 2020, Pharos separately reported $75MM raised for its Fund IV LP. [Other active TN-based RBICs include the Innova Ag Innovation Fund in Memphis, reported here, and a Meritus Ventures affiliate, reported here.] Our original Oct. 10, 2019 story appears below. Our other Pharos coverage is here. -Ed.
AFFILIATES OF Pharos Capital Group of Nashville and Dallas filed this week for their planned $250MM Fund IV-A, showing nearly $106.3MM in as of Oct. 9.
The 21-year-old Pharos Capital Group describes itself as a physician-founded PE that invests $25MM-$50MM "in growing healthcare companies that lower the total cost of care, improve patient outcomes and expand access to care."
Pharos III, a $545 million healthcare-focused private equity fund, and Pharos II hit at least $400MM, according to earlier media reports.
Associated with the latest filing are: Founding Partners Kneeland Youngblood and Bob Crants, and partners Joel Goldberg, Anna Kovalkova, and Jim Phillips.
Deal criteria on Pharos Capital Group's website include:
- Funding for acquisitions, leveraged buyouts, management buyouts, and recapitalizations of cash flowing businesses.
- Revenue of at least $10MM.
- EBITDA of at least $2MM.
- Growth rate of 20% or more, either organically or via acquisition.
- Investment size of $20MM to $50MM per platform company.
- Emphasis on undercapitalized businesses in underserved U.S. regions.
The firm's affiliates invest in Healthcare only, with interest in subgroups including:
- High quality, outcomes focused healthcare providers
- Managed care services
- Behavioral health
- Wellness, disease and/or population management
- Diagnostic technology and services
- Medical device companies with FDA approved technology
- Healthcare data analytics and outcomes measurement
- Other companies serving the healthcare sector
Pharos also says, "We seek to make investments in healthcare companies that improve the patient experience of care (including quality and satisfaction), reduce the total cost of health care, and possess attractive growth prospects either internally through core revenue growth or externally through acquisitions.
"Conversely, we do not target investments in companies in the drug development, life sciences, and biotechnology sectors, due to the long development cycle necessary before they typically generate significant revenue.
"We look to back companies with professional management teams whether that be the existing team, our stable of proven Healthcare Operating Partners, or a combination of both.
"We prefer portfolio companies that offer multiple exit opportunities. These exit strategies may involve a financial buyer, an initial public offering, a recapitalization or a sale to a strategic purchaser.
"We tailor the deal structure of each investment to meet the risk and return objectives of the Partnership while striking the appropriate balance with the needs of the entrepreneur and existing shareholder.
"We target companies that have defensible market positions, sustainable competitive advantage and unique attributes to their business model". (###)
last edited Oct. 10, 2019 1642 CT