Client Objective

In 2011, Dr. Walid Mahmoud opened his first urgent care center in Sylvania, Ohio, a suburb of Toledo. By 2020, Dr. Mahmoud had grown Greater Toledo Urgent Cares (“GTUC”) to six locations while balancing the demands of business ownership with his role as an emergency department physician.

In 2019, Dr. Mahmoud was approached by a hospital system interested in acquiring GTUC. Over the past decade, many hospital systems have strategically pursued urgent care acquisitions as a way to take market share away from competing hospitals and alleviate the burden on overcrowded emergency rooms. GTUC was an attractive acquisition target due to its commanding presence in northern Ohio.

Discussions with the hospital system continued slowly for months and valuation negotiations eventually stalled. But Dr. Mahmoud still wanted to sell his practice. Based on the recommendation of an advisor, Dr. Mahmoud engaged Mariner Capital Advisors to help facilitate the sale process.

Solution

Given Dr. Mahmoud’s objectives, Mariner Capital Advisors began performing research on the potential buyer pool for urgent care practices. The buyer pool included a mix of acquisitive national and regional urgent care brands lacking a presence around the Great Lakes region, as well as private equity firms and family offices that either had existing urgent care investments or had interest in multisite healthcare or consumer service businesses.

Mariner Capital Advisors prepared offering materials for GTUC, which highlighted a variety of operational and financial attributes of the business, including its ability to treat high acuity patients, strong payor mix, favorable locations and attractive margins. We also highlighted Dr. Mahmoud’s interest in remaining invested and involved in GTUC, which we knew would be attractive to potential buyers since it demonstrates the confidence the seller has in their ability to grow the business and provides operational continuity post-transaction.

In the early stages of the sale process, COVID-19 made its way to the U.S., wreaking economic havoc and placing enormous pressure on the healthcare system. Nonetheless, Dr. Mahmoud continued to balance his time working on the front line to save the lives of COVID patients while ensuring GTUC continued to serve the community. Meanwhile, GTUC’s competitors closed their doors. GTUC, however, only closed two of its locations but kept others open and began offering telemedicine and testing services.

During the process, Dr. Mahmoud’s sale objectives evolved. While he was originally interested in selling 100 percent of GTUC and transitioning out of the business, he began considering maintaining some ownership and continuing to help grow the company post-transaction. With the future in mind, Dr. Mahmoud began developing a seventh location in southern Michigan, which opened in early 2021.

Meanwhile, we continued our search for a prospective buyer for GTUC. During the process, we attracted interest from multiple strategic buyers and private equity firms and received multiple formal offers. The fact that Dr. Mahmoud was interested in remaining with the business helped draw even stronger interest.

Result

By September 2020, Dr. Mahmoud signed a letter of intent with Traverse Pointe Partners (“Traverse Pointe”), a private equity firm based in Chicago, to sell GTUC and each location’s real estate. Traverse Pointe invests in lower middle-market companies and partners with management to assist with strategic and operational initiatives and helping to complete add-on acquisitions. Traverse Pointe’s unique approach to real estate involved with M&A transactions, combined with their interest in healthcare and Dr. Mahmoud’s interest in retaining partial ownership, made GTUC and ideal platform investment.

Mariner Capital Advisors successfully completed the sale of GTUC to Traverse Pointe in June 2021. Dr. Mahmoud and Traverse Pointe will continue to search for opportunities to acquire other urgent care practices and greenfield new locations across the Great Lakes region.

About GTUC

Founded in 2011 and headquartered in Toledo, Ohio, GTUC is a leading multilocation urgent care provider, serving northern Ohio and southeast Michigan. The company provides high acuity patient care and serves the surrounding community with extended hours and telemedicine services. GTUC provides treatment for a wide range of illnesses, injuries and common conditions, in addition to diagnostic and screening services in a convenient and affordable setting.

About Traverse Pointe

Traverse Pointe is a Chicago-based private equity firm investing in lower middle-market companies across healthcare, business services, consumer products and more. Traverse Pointe seeks to create strong partnerships with management and leverage their network and resources to augment their portfolio company’s growth trajectory.

This document is for informational use only and may be outdated and/or no longer applicable. Nothing in this publication is intended to constitute legal, tax, or investment advice. There is no guarantee that any claims made will come to pass. The information contained herein has been obtained from sources believed to be reliable, but Mariner Capital Advisors does not warrant the accuracy of the information. Consult a financial, tax or legal professional for specific information related to your own situation.