AWARD SPOTLIGHT: Imperial Capital Limited winner of NEW 2020 PE Global Dealmaker Award for MRO Corporation

Congratulations to Imperial Capital Limited for winning the 2020 PE Global Dealmaker Award for MRO Corporation. The 2020 CVCA Awards, sponsored by HarbourVest Partners Canada, will be announced each day June 8 – June 12, 2020 on social media beginning at 11am ET.

MRO Corp.was founded in 2002 with a goal to build an online document platform. The Norristown, Penn.-based company (which originally stood for Medical Records Online), began by taking paper-based healthcare records and scanning them into an online repository that could be accessed through a web browser. The service was in high demand, but other companies were on the same track.

“We realized pretty quickly that was going to be a crowded space,” says MRO co-founder and CEO Stephen Hynes.

Instead, Hynes and his co-founder Dan Heist drew from their backgrounds in release of information (ROI), which is a service to facilitate the release of medical records to authorized third parties such as attorneys, insurance companies, governmental agencies, other healthcare providers, and patients.

The duo decided to take the technology they built for the document management solution and bring it into the ROI world, which Hynes says was ​“ripe for a technology-focused play.”

The company built its ROI workflow on top of a document management platform, and the customers soon followed.

About a decade into the business, after establishing itself as a leader in disclosure management and health information exchange, MRO decided to recapitalize the company and, with the help of advisors, began a competitive process to find a proactive investor.

In 2014, it struck a deal with private-equity fund Imperial Capital Group of Toronto, which took 75% of the company, while existing MRO shareholders rolled over the remaining 25%.

Hynes, who was president at the time, took over as CEO to take the company to the next level.

Justin MacCormack, a managing partner and head of healthcare investing at Imperial Capital, says his firm saw an opportunity for MRO to significantly scale its business and technology. Imperial had a plan to bolster the MRO team, while also investing in sales, IT and the overall operations.

It also built a robust board to include independent members with connections in the healthcare industry.

“We consciously sought out members that could add a lot of value to the business and help accelerate its growth,” MacCormack says.

The PE firm also knew it would mean a couple of tough years before they saw their investment start to pay off. ​“It’s rarely a straight line to success,” MacCormack says.

After two years, MRO’s EBITDA tripled annually. Imperial, which had a five-year plan in place, decided in 2019 it was time to sell.

“We had a thesis. We had a five-year goal in mind and we exceeded that,” MacCormack says. ​“We looked at the strength of the company and the tailwinds and the market appetite. We didn’t sell early, even though we could have. We remained true to what we set out to do.”

In October 2019, after a competitive auction, MRO announced that it was being bought by a U.S.-based private-equity firm.

At the time of the exit, Imperial Capital earned an internal rate of return of 55.1% and an 8.8x multiple on invested capital.

Imperial Capital and MRO are the recipients of the CVCA’s PE Global Dealmaker Award.

“One of the reasons for the success of the company is that we have a customer-focused culture and also built a better technology platform than our competitors,” says Hynes, who continued as CEO.

“We had the right mix of people, the right technology, the right positioning and we were able to take what we built and build our footprint,” Hynes said, noting that MRO is now the second-largest provider of secure, compliant and efficient exchange of protected health information in the U.S. and has won the prestigious KLAS Category Leader Award for ROI Services seven consecutive years, which is based on client feedback.

Going forward, Hynes says MRO will continue its growth trajectory while also diversifying into new services and markets through continued organic growth plus acquisitions.