Bain Capital Ventures, Spectrum Equity to invest in MedHOK -sources

Wed Jan 8, 2014 5:00am EST

Jan 8 (Reuters) - Bain Capital Ventures and Spectrum Equity are expected to take minority stakes in healthcare software provider MedHOK for $77.5 million, according to people familiar with the matter.

The two firms, which have a track record of investing in healthcare companies, are betting on growing demand for cloud computing services as the healthcare industry shifts to a model that links reimbursement to performance rather than the number of transactions, the people said.

Tampa, Florida-based MedHOK, or Medical House of Knowledge, offers software-as-a-service for hospitals and accountable-care organizations such as Kaiser.

The company, which is profitable and has more than 100 employees, is seen as a future candidate for a public listing or a sale, the people also said, asking not to be identified because the matter is not public.

MedHOK and Equity Spectrum declined comment. Bain Capital Ventures was not immediately available for comment.

Cloud computing, such as the software-as-a-service MedHOK offers, can be accessed on demand, allowing clients to reduce costs by trading local servers for network-based software and storage in remote data centers.

Bain Capital Ventures, the venture and growth capital arm of Bain Capital, and investment firm Spectrum Equity have made a number of investments in healthcare IT.

Bain Capital Ventures' investments in healthcare have included private benefit exchange Liazon, digital health company Humedica, dialysis company Liberty Dialysis and walk-in medical service Minute Clinic - all of which Bain Capital Ventures eventually sold.

Spectrum Equity's investments include HealthMEDX, a provider of long-term and post-acute care technology and Net Health, a software provider for outpatient specialty care.

Spectrum Equity also invested in Passport Health Communications, which it sold to Experian in November 2013, and in QTC Management Inc, which it sold to Lockheed Martin in September 2011.

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