With GreatCall Deal, GTCR Looks to Expand Healthtech for Boomers
With this week’s buyout of GreatCall, the Chicago-based private equity firm GTCR just placed a big bet that healthtech for the aging wave of baby boomers will be a big business.
GreatCall operates a virtual telecommunications network that provides healthtech products and services for more than 800,000 older consumers throughout the United States. The company, founded in 2006, began by selling easy-to-use “Jitterbug” mobile phones, and expanded its offerings to include a variety of welfare and safety-related services. A key part of this strategy are call centers (GreatCall CEO David Inns insists on calling them “caring centers”), where trained agents answer health questions, respond to medical emergencies, and provide “concierge services” for elderly customers.
The idea of a healthcare concierge—someone to provide personalized navigation of the complicated maze of care providers and insurance coverage—is at the center of a growing number of healthcare technology companies. They aim to provide a level of service previously limited to wealthy individuals, often with a hefty dose of technology to help the human concierges tailor recommendations to each patient. Other examples include Seattle-based Accolade, which provides concierge services to the covered populations of large self-insured employers and insurance companies, and direct care providers such as San Francisco-based One Medical Group.
GTCR is betting that GreatCall’s customer base can only grow as more baby boomers enter retirement. In keeping with its usual strategy, GTCR plans to keep the GreatCall management team in place and expand the company’s business by making additional acquisitions and through organic growth.
In a phone call late Thursday, GTCR managing director David Donnini said the firm had been researching this segment of the healthtech industry for five to seven years. “GreatCall is the biggest, it is growing the fastest, and it has the best performance in this space,” Donnini said.
The company would likely look for acquisitions to expand service offerings and add different customer groups, Donnini said. “We’re looking for strategic opportunities to expand the business and edge the business out toward new markets,” he said.
In an interview last November, GreatCall’s Inns said roughly 44 million Americans are 65 or older, and they or their caregivers spend over $500 billion a year. Moreover, the peak of this wave has yet to hit retirement. Altogether, the U.S. Census Bureau estimates that 76 million Americans were born from 1946 to 1964 (the baby boom years). Although some 11 million have died, immigration has kept the overall total of boomers above 76 million.
GTCR’s buyout has the portents of a big deal. But financial terms were not disclosed, and Inns declined to even approximate the buyout price.
“It’s a big deal, because in what we call the ‘active aging’ space, we are one of the biggest companies, and nothing like this has happened before,” Inns said. He noted thatGreatCall now has about 1,200 employees (the company operates call centers in Carlsbad, CA, and Reno, NV, and employs roughly 300 at its San Diego headquarters) and generates over $250 million in annual revenue.
The deal is expected to close in the third quarter of 2017.
In 2016, GTCR paid over $500 million to acquire Lytx, a San Diego technology company that provides DriveCam video cameras in the cabs of commercial trucks to improve driver safety. In 2014, the private equity firm bought San Diego-based Xifin, which makes Web-based software for the healthcare diagnostics market. Financial terms were not disclosed.