July 12, 2006

By Natalie Dolce, Assistant Managing Editor

Behrman Capital has sold portfolio company Tandem Health Care Inc. to a consortium of JER Partners and Formation Capital L.L.C. in a transaction valued at $620 million, the company said today.

Behrman, a private equity investment firm, initially invested in Tandem in April of 1998 to demonstrate its continued focus on emerging growth companies in the healthcare sector and to back an extremely experienced management team, Behrman Capital’s managing partner Grant Behrman (pictured) told CPN. "Since that time, we have made additional equity investments to facilitate multiple acquisitions to supplement growth, enter new geographic markets, and expand the company's product offering."

Behrman pointed out that many ancillary services have been added to Tandem. Services now include short-term transitional care, long-term nursing care, Alzheimer's care, assisted living, rehabilitation, mobile diagnostic imaging, as well as pharmacy and hospice services, and it currently operates facilities and ancillary service operations in twelve states.

"We have had an eight-year holding period. We have accomplished all of our objectives and strategies since first embarking in 1998," Behrman said. "Tandem's first acquisition had revenues of $25 million ... the company has grown into a $600 million annual enterprise."

Although neither JER nor Formation could be reached by press time, this transaction is the largest acquisition to date for Formation, which, with JER, plan to restructure Tandem into an owner of skilled nursing and other senior housing facilities and to enter into a master lease for all of its facilities with Consulate Healthcare, according to a statement.