Case Study: Passport

Explore this investment 11.20.13

Fast Facts

  • Recruited Senior Management
  • Supported Significant Technology Investment
  • Optimized Go-to-market Strategy
  • Advised on Sale

We first called on Passport Health in 2003 as part of ongoing research in the revenue cycle management sector, identifying the company as a market leader with a compelling business model. We built a strong relationship with the management team over the next five years while discussing various investment scenarios. Upon learning that Passport was contemplating a recapitalization to coincide with its acquisition of Nebo Systems, we aggressively pursued the company and, in July 2008, co-led a recapitalization of Passport with another private equity firm. After acquiring Passport, the investors oversaw the executive search processes that led to the hiring of a new CEO, CFO, and CTO, transforming the management team over our first 18 months of ownership.

Great Hill drove the efforts to overhaul the company’s go-to-market strategy, directly leading the executive search for the new SVP of Sales and Marketing, and vetting all candidates on behalf of the CEO and other investors. This overhaul of the company’s sales and marketing effort led to shrinking direct sales territories, assigning named accounts, increasing direct sales head count, creating an inside sales team for smaller accounts, and increasing accountability and incentives for upsells and bundled sales performance. Additionally, the board approved significant budget increases in research and development that grew capital expenditures from $3 million annually prior to our acquisition to $9 million by 2012, resulting in a significant upgrade in the depth and breadth of Passport’s product line.

The effect of these initiatives on company performance was dramatic. Following this enhanced product development spending, in 2011, Passport launched its flagship patient registration suite, eCareNext, which quickly became the #1 KLAS-ranked product. The revamped sales team drove annual bookings from under $11 million in 2009 to $46 million in 2013.

Passport Health was sold to Experian plc for $850 million in November 2013, a purchase multiple of 7.3x revenue and 20.3x EBITDA for LTM September 2013. We believe the purchase price reflects the premium value of a high-growth, recurring revenue software and data services business positioned at the heart of the hospital patient admission process.