NewSpring Capital Leads Verisma Investment

With a $5M investment, the PE firm is looking to create efficiencies in medical records distribution.

The distribution of medical records might sound like a simple process: Someone asks for information, and someone else provides that information. However, with an increasingly diverse group of constituents requesting this sensitive data, and the growing emphasis on protection, the aggregation and dissemination of this information is far more complex than it sounds.

“People request medical records for lots of different reasons,” explains Brian Murphy, general partner at NewSpring Capital. The need to capture the piles of medical records and information produced by different groups in both hospitals and health systems has exploded as a result of laws and big data. Murphy says the most prevalent and growing group is made up of providers of medical care, as well as patients.

With that in mind, Radnor, Pennsylvania–based private equity firm NewSpring Capital announced its $5M investment in health information technology provider Verisma. The portfolio company focuses on next-generation cloud-based solutions that automate and deliver comprehensive release management and audit capabilities in an efficient and cost-effective method.

NewSpring partnered with Blue Heron Capital and Jim Crook, the former president of IDX Systems Corp., on the Verisma deal. Altogether the group invested $12M. Murphy says Verisma will use the cash infusion to add to the company’s sales and marketing efforts, bring additional resources to the management team, and continue to evolve its technological offerings. The capital will be also used to facilitate Verisma’s entrance into the acute–care space, he says.

NewSpring was founded in 1999, and since then the firm has raised more than $1B and has invested in more than 100 portfolio companies, focusing on growth equity in healthcare. NewSpring Healthcare invests across the services, specialty pharmaceutical, and medical technology spaces. Murphy overseas the firm’s healthcare investments, which tend to use technology to provide efficiencies and drive down costs for providers.

As part of the Verisma deal, NewSpring will have a seat on its board of directors. The firm is the lead investor in the transaction. While NewSpring will not take a day-to-day approach with its new portfolio company, the firm will work closely with Verisma’s current management team, Murphy says. In addition to financial resources, NewSpring will provide overall strategic operational guidance.

In terms of expanding Verisma’s footprint, there are a number of options, says Murphy. “We will look at all avenues of growth,” he says, adding that the strategy includes organic expansion as well as making “selective acquisitions” in a “dynamic market.”