Capital Infusion - May 2013: Deal Spotlight: Patton Boggs Advises on Innovative Health Care Transaction

Patton Boggs recently advised Satori Capital, a Dallas-based private equity firm, on its acquisition of Longhorn Health Solutions, Inc. Longhorn is headquartered in Austin, Texas and is a leading direct-to-home provider of consumable medical supplies and durable medical equipment. Longhorn also recently launched a pharmaceutical division that serves the entire state of Texas. Longhorn employs a unique business model in which it brings its medical products directly to the homes of Medicare, Medicaid and privately insured patients utilizing vans dispatched from its warehouses located throughout Texas, a model that has been called the “future” of patient provided health care.

While financial terms of the transaction were not announced, Longhorn’s founder and Chief Executive Officer Britt Peterson maintained an ownership position in the company and will continue as its CEO.  The transaction was particularly notable for the complex health care regulatory hurdles that had to be overcome and addressed in order to maintain continuity of Medicare and Medicaid provider status, as well as preserve the company’s competitive bidding arrangements and other aspects of its business and operations.

The Patton Boggs attorneys advising on the transaction worked closely across several different practice groups, including private equity and corporate finance, health care, public policy and tax, to achieve the most efficient and beneficial outcome for the overall transaction – taking both its client’s, as well as the seller’s, interests into account. The transaction was particularly challenging given the short time frame surrounding a closing at the end of December. In addition to the looming fiscal cliff which was motivating buyers and sellers across all industries to urgently close transactions and putting a strain on resources of financiers, lenders and investors, the year-end holiday season is always a difficult environment to coordinate the necessary Federal and state regulatory notices, licensing and approvals that are involved in the acquisition of a health care service provider such as Longhorn.

The closing of the Longhorn transaction was a testament to the hard work, perseverance and skill of all of those who were involved in pushing it successfully across the finish line. “Only 14 days passed from the time we selected a lender to the time we completed the investment,” said John Grafer, a Principal at Satori. “We appreciated the focus and intensity with which the Patton Boggs team worked to help us complete the investment before the holidays.”

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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