Balance Point Capital Advisors, LLC (“Balance Point”), along with its affiliated funds, Balance Point Capital Partners V, L.P. and Balance Point Capital Partners VI, L.P., has announced its substantial investment in SG Homecare (“SG”), a portfolio company of the Boston-based private investment firm, Sverica Capital (“Sverica”). The investment will facilitate SG Homecare’s acquisition of Western Drug, the retirement of existing debt, and provide additional capital for future working capital needs.

Financial Details and Strategic Goals

This financial maneuver by Balance Point underscores its commitment to providing flexible capital solutions to the lower middle market. The terms of the deal were designed to support SG’s strategic acquisition of Western Drug, a fellow durable medical equipment (DME) provider, enhancing SG’s operational scale and market reach in Southern California.

SG Homecare and Western Drug: A Strategic Fit

SG Homecare, established in 2001, operates 16 locations throughout California, offering durable medical equipment, disposable medical supplies, and related services. It is well-regarded for its capitated revenue model, which has proven effective among large physician networks managing extensive patient care. Western Drug, founded in 1977 and operating 9 locations, predominantly generates revenue through a large fee-for-service customer base, complementing SG’s business model.

Adam Sauerteig, a Partner at Balance Point, expressed enthusiasm about the acquisition: “The combination of SG and Western not only strengthens SG’s presence as a leading DME provider in California but also enhances operational efficiencies and market synergies.”

Leadership and Future Directions

Jay Wendt, CEO of SG, praised Balance Point’s role in the acquisition, highlighting the firm’s effort to understand SG’s operational goals and the strategic opportunity the acquisition presents. “We value Balance Point’s diligent partnership and look forward to integrating our operations with Western as we continue our growth trajectory,” Wendt stated.

Doug Patrican, Vice President at Sverica, also commented on the partnership, noting, “We are thrilled to work with Balance Point again and anticipate a productive partnership in support of SG’s objectives.”

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