Axia Health Management LLC
Fund: Genstar IV
Opportunity
Genstar’s investment in Axia Health Management (“Axia”), a pioneer in the provision of integrated prevention health and wellness services to health plans and large employers, was a result of Genstar’s focus on the healthcare services industry.
Axia management, led by Ben and Hugh Lytle, recognized a significant unmet need in the health plan and employer market place for a company that could provide a complete spectrum of prevention and wellness services. Progressive health plans and employers have increasingly come to appreciate the value of high yield preventive health interventions (e.g. exercise classes, smoking cessation programs, life-style coaching, access to alternative health providers) to both improve the health of their members/employees as well as significantly reduce their overall medical costs, but adoption was hampered by the lack of program providers who could deliver all of the key types of interventions in an integrated fashion and through multiple venues.
In November 2004, Genstar partnered with Axia management together with Nautic Partners to begin building such a company through the acquisition of Healthcare Dimensions, Inc., a $40 million revenue provider of branded exercise classes for seniors through a network of over 1,000 fitness centers around the country.
Strategy
Genstar and Axia management developed a detailed strategic plan to build a truly integrated and comprehensive provider of prevention and wellness services. Guided by the plan, four additional unique health and wellness focused companies were acquired over a fourteen month period. Management was able to integrate these businesses quickly and develop a cohesive management team.
Result
In 2006, Axia grew dramatically to over $150 million in revenue and more significantly sold its first integrated prevention and wellness program to a top five health insurer, validating management’s and Genstar’s original market thesis. As a result, Axia quickly became recognized as the market leader in its field and was approached, unsolicited, by a number of interested strategic buyers. In November 2006, Axia was sold to Healthways, Inc. (HWAY).