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Water Street Sells Majority Interest in CareCentrix

Water Street Healthcare Partners, a strategic private equity firm focused exclusively on the health care industry, announced today that it has completed a sale and recapitalization of CareCentrix, Inc.

Headquartered in East Hartford, Connecticut, CareCentrix is the nation’s leading provider of home health benefits management services to the managed care industry. Water Street sold its majority interest in CareCentrix to Summit Partners. The firm will maintain an ownership position in CareCentrix and continue to participate in its rapid growth.

Water Street acquired CareCentrix from Gentiva Health Services in 2008. In less than three years, the firm transformed CareCentrix into the nation’s leading home health benefits management company. Water Street established CareCentrix as an independent company, recruited the senior management team, and expanded CareCentrix’s core services through organic initiatives and acquisitions. Together with the management team, Water Street more than doubled CareCentrix’s contracted revenues from 2008 to 2011.

“Water Street has been instrumental in helping us to establish CareCentrix as one of the fastest growing companies in health care. Its team’s extensive expertise in payer services and network of industry relationships enabled us to expand at an accelerated pace to provide significantly greater value to our customers. I am excited that the material growth we achieved together has attracted Summit Partners to invest in CareCentrix’s future. We are excited to continue our partnership with Water Street to build value that will benefit our customers and employees,” said Eric Reimer, chief executive officer, CareCentrix.

Since partnering with Water Street, CareCentrix has grown to manage home nursing, infusion and medical equipment services for more than 30 million people across the country through a network of 7,000 credentialed home care providers. In 2010, the company introduced a new program, HomeSTAR, which has proven to reduce the number of people being readmitted to the hospital. Earlier this year, CareCentrix acquired Sleep Management Solutions LLC (SMS) to expand its services into the fast-growing area of sleep benefits management.

“CareCentrix is an excellent example of the value Water Street creates through our corporate partnership strategy. Working closely with a strong management team, we transformed CareCentrix from a lower-priority division of a public company into one of the fastest growing companies in healthcare,” said Ned Villers, partner, Water Street. “We are pleased that our efforts resulted in a transaction that delivered an outstanding return to our investors, and look forward to continuing to build and grow CareCentrix.”

Water Street currently owns 13 companies in the following health care sectors: medical and diagnostic products, specialty distribution, life sciences and specialty health care services. CareCentrix is one of the firm’s four companies that specialize in payer services. Other companies include Access MediQuip, HealthPlan Holdings, and New Century Health.

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