Joining Sentinel Portfolio Companies
Established in 1966, Interim is one of the nation’s largest providers of home healthcare services through a national franchise system. Its franchisees, who operate more than 325 branches across 37 states, deliver a range of home healthcare services, including home nursing, home hospice care, and home assisted living. Interim provides daily care to more than 50,000 people and generates annual systemwide sales of approximately $750 million.
Background
Under previous ownership, Interim had embarked on an expensive company-owned branch and infrastructure buildout program. This strategy, coupled with the repercussions of the 1997 Balanced Budget Act, significantly affected Interim’s performance. Sentinel’s investment thesis centered on returning Interim to its original focus by exiting all noncore businesses.
Interim’s founding CEO, who started the company 40 years earlier, planned to retire following its sale. He agreed to serve as interim CEO, help search for his replacement, and assist with the transition.
Opportunity
To recruit a CEO with a strong background in healthcare and franchising to lead Interim’s transformation and repositioning
Accomplishments
Located the Right Executive: The CEO search led to Kathleen Gilmartin, who had spent 16 years in the Interim system working both for Interim and a large franchisee. A nurse by training, Ms. Gilmartin had also been COO of one of the nation’s largest providers of nurse staffing services.
Refocused Interim Under New Leadership: After assuming the CEO position, Ms. Gilmartin led Interim’s restructuring and repositioning and transitioned the company into a pure-play franchisor with a focused offering of home healthcare services. Specifically, Interim refranchised all of its company-owned branches and exited all noncore businesses by shutting down its travel nurse staffing business, spinning off its physician staffing business, and divesting its occupational health business and captive home healthcare software division. Interim also launched new service offerings in home hospice care and home assisted living.
Outcome
Under Ms. Gilmartin’s leadership, Interim’s growth accelerated and its free cash flow increased substantially. In 2012, having held the investment for six years and having achieved our investment objectives, Sentinel sold Interim to another private equity firm in a management buyout transaction. Ms. Gilmartin continued as Interim’s CEO.
Case studies have been selected for illustrative purposes for management teams of midmarket companies considering a partnership with Sentinel and should not be considered an offer or solicitation of services or an actual or implied endorsement of Sentinel or any security, investment, or portfolio company. The portfolio companies highlighted are not representative of all current and prior investments of Sentinel. A list and description of investments since Sentinel’s inception is available on this website.