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medaptus Case Study

medaptus Case Study

  • Headquarters: Boston, MA
  • Acquisition Date: November 2020
  • Vertical Market: Healthcare
  • Visit Company Website


Since 2000, medaptus has been a leading provider of revenue cycle improvement, coding automation, and patient assignment software. For the majority of that time, medaptus was owned by a venture capital (VC) firm that provided funding to support the company’s early growth and innovation. The long-term nature of the investment in medaptus is unusual for VC firms which typically hold onto the businesses they invest in for much shorter time frames before preparing to sell again.

When considering a potential acquirer for medaptus, the VC investors and medaptus management sought an organization that would not only offer a fair valuation but would also be a strong partner that would provide growth opportunities for the long-term. The search for an acquirer began in 2019.

Decision to Sell

The medaptus team first became familiar with Constellation Software Inc. (CSI), parent company of Volaris Group, in 2012 and continued to follow CSI until the search for a permanent buyer began. Both strategic buyers and PE firms were considered, but the importance of a long-term investment partner for medaptus was considered a top priority. As Larry Hagerty, CEO of medaptus at the time of the Volaris acquisition explains, “The Volaris model provides many advantages. Businesses that join Volaris operate as independent entities and are focused on building their organizations for the long-term. There is no need to worry about preparing the business for the next sale.” The buy-and-hold strategy of Volaris Group enables companies to learn from the network of more than 100 business units as they continue to operate autonomously.

When recounting the process of finding an acquirer, Hagerty mentioned the consistent interest of Volaris as a key factor. Throughout many conversations, he saw the values and benefits of Volaris shine though.

It was clear that Volaris provides a strong formula and methodology to promote growth for businesses like medaptus.

Larry Hagerty, CEO, medaptus

Newly acquired businesses gain access to an ecosystem of best practice sharing and resources that are backed by over 25 years’ experience in software. For software businesses in the Healthcare industry specifically, there are even more resources available due to Volaris’ growing momentum in this vertical. Joining the growing portfolio of Healthcare businesses was another important factor in medaptus’ decision to join Volaris.

Post-Acquisition Experience

In the midst of the COVID-19 pandemic, medaptus ownership and management worked together with Volaris to finalize the deal, and medaptus was officially acquired in November 2020. While an eventual sale of medaptus was anticipated given the nature of VC investment, there are always concerns by customers and staff about business continuity and focus whenever an acquisition occurs. The unique Volaris acquisition approach, which emphasizes operational autonomy, alleviated those concerns while also providing access to the financial backing of CSI, a publicly-traded company on the Toronto Stock Exchange.

Post-acquisition, the immediate emphasis was to keep the medaptus team focused on customers and operations, while working to rapidly align financial systems, reporting, and other back office activities with the Volaris model. Early on, the company gained access to global Volaris business resources and best practices. During integration, all medaptus employees attended Volaris 101 - an intensive training designed to transparently share key benchmarking metrics used across all Volaris businesses. As Malachi Charbonneau, medaptus General Manager says, “The consistent benchmarking across all Volaris companies makes the roadmap clearer for staff. Volaris 101 is tailored to smaller software businesses and helps employees understand the direct impact that their work has on business performance.”

Many of the benchmarks introduced in the Volaris 101 training are included on employee scorecards, which were introduced to the medaptus team within the first few months following acquisition. Talent management is important for all business units at Volaris Group. Employee scorecards, which highlight how business success is tied to the work of employees in all departments, are also an integral part of the Volaris talent management process. The process provides direct visibility for all employees on company goals while also providing clear direction on individual goals.

One of the most positive impacts on the medaptus organization so far has been the clear emphasis by Volaris on the talent management process.

Malachi Charbonneau, General Manager, medaptus

Talent development for senior leadership is also important at Volaris Group. In December 2020, just a month after medaptus joined the organization, Volaris hosted a first-of-its-kind virtual networking event for the Healthcare industry. In this session, members of the medaptus management team and other leaders from Volaris businesses presented insights on a popular industry topic for software business executives. Hagerty recounts: “I really enjoyed getting to talk with other companies in the Healthcare industry. The more that we can build a portfolio of high caliber Healthcare businesses, the more opportunities are created for synergies.” The Volaris team has plans to continue these networking events in the future to provide more opportunities to the leadership teams of newly acquired businesses.

While there are many potential buyers of software businesses in the marketplace, Volaris Group provides a unique opportunity for entrepreneurs to continue to grow their businesses autonomously while gaining access to the business process, training, best practices, and financial resources of a multi-billion dollar parent company. As Larry Hagerty says, “If you want to grow your business for the long-term, Volaris is a great environment for you to do that. There is a great structure in place, with guidance and support every step of the way.”