We really want to change health care. We want to bend that cost curve and help management teams.
A new investment group that focuses on growing health care technology companies has launched in Chattanooga.
Transparency Health will look nationally at acquiring and investing in lower middle-market businesses and is led by founding partners David Paschall, Rebekah Elkins Sharpe and John Riley.
The trio said Thursday that they have 45 years of combined professional experience in health care technology, most recently at TractManager. That company centralizes, monitors and controls contract management for hospitals around the country with its Meditract subsidiary, which operates out of Chattanooga.
Paschall said the name that the investment group picked counts for a lot.
“We intentionally selected the name Transparency Health to represent who we are – experts who open a transparent path forward for companies with smart solutions,” he said.
Headquartered at the Fleetwood Building downtown, Transparency has committed capital from investment management group Noon Management LLC.
Sharpe said health care technology is different from other sectors, in part, due to the time it takes to generate revenues – as long as 12 to 18 months.
“A lot of people struggle with how to call on hospital executives,” she added.
Riley said that the sales cycle is longer in health care, and the dollars in the segment are tighter than ever.
He said the three saw they have developed skill sets which are complementary and could impact health care and help companies grow.
Paschall said the three were involved in acquisitions at TractManager which helped drive the growth of that company.
“We saw an opportunity,” he said. “We really want to change health care. We want to bend that cost curve and help management teams.”
Paschall said the group’s “sweet spot” will be to become involved in either the first or second major investment levels of companies. That could involve infusions from $2 million to $30 million to help the businesses expand, he said.
Sharpe said that if there are opportunities to bring companies to Chattanooga, they’ll do that as well.
She said that while Chattanooga is strong in the logistics and outdoors areas, the group sees opportunities in health care technology, especially with the city’s proximity to Nashville and Atlanta. In addition, Sharpe noted Chattanooga’s ultra-fast internet service.
To date, the group has reviewed about 80 companies and engaged nine, the partners said.
Also, Dr. Keith Helton joined Transparency Health as a physician advisor aimed at contributing key insights and vision regarding clinical and physician-related solutions.
For more than 20 years, he has been a practicing specialist in internal medicine and pediatrics and has founded five physician-led health care companies, according to Transparency.
Keval Health LLC acted as financial advisor on the formation and recapitalization of the new company.
Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318. Follow him on Twitter @MikePareTFP.