SurePoint Medical Recapitalized by Investment Firm, Prospect Partners, as It Makes Its First Investment in Fund III

Based in Chicago, Illinois, Prospect Partners is a prominent private equity firm that primarily invests in lower and middle market companies. The firm announced in January 26, 2011, that it has just made its first investment in diabetes medication delivery company, SurePoint Medical, which is based in Lawrence, Kansas from its third fund, which is worth $200 million.

The investment that Prospect Partners has made is primarily a management based recapitalization, which will work well for Prospect Partners, since companies in the healthcare industry is the firm’s second speciality.

The deal that has closed the funding for third fund that Prospect Partners has created, Prospect Partners III, LP, was closed in August of 2010. Much like the other two funds that Prospect Partners has are to leverage recapitalizations and acquisitions in companies which are leaders in niche markets and typically generates revenues which are below $75 million. Currently, with all three funds that Prospect Partners holds under its management total to $470 million backed by a group of undisclosed institutional investors.

SurePoint Medical is one of the nation’s leaders in the mail-order and delivery of medications to treat both diabetes Type 1 and Type 2. For diabetics, medications can be very important and even critical, depending on the severity of their diabetes. In the US alone, around 23.6 million people are believed to have diabetes, and the most disturbing aspect of this data is that annually, 1.6 million people are diagnosed who are age 20 or over. This can lead to costs that exceed $174 billion.

Founded in 2006, SurePoint Medical provides diabetics with the convenience and saves them time by delivering diabetic medications and instruments directly through the mail, allowing diabetics to have more time to enjoy doing other things, besides waiting in a pharmacy until their prescriptions are filled. Some of the supplies that SurePoint Medical delivers include glucose meters, testing strips, lancets, and insulin pumps. SurePoint Medical also provides all the prescriptions for both Type 1 and Type 2 diabetics, such as insulin in both pill and injectable form.

According to the founding principal of Prospect Partners, Louis Kenter, SurePoint is a rapidly growing company which has in a short time established a strong presence in a fragmented but high growth niche market. Mr. Kenter further added that SurePoint Medical is led by an amazing management team, which has great experience in both the diabetic mail order industry and customer service. The two ingredients for a team that achieves success in this kind of business.

Some other companies in Prospect Partners portfolio include Codel Holding Company, ESI Lighting, Gold Star Food Services, Knight Packaging Group, Kronos Foods, and others.