GTCR Golder Rauner LLC, a 20-year-old Chicago equity company, Tuesday announced a partnership to fund a new healthcare marketing services company with Gil Bashe, who until Friday, Dec. 3 was CEO of Commonhealth USA, the mega-healthcare marketing division of WPP Group. GTCR will provide $60 million to fund the new network, which will launch some time in January 2000.
The new marketing services network will be built around pharmaceutical advertising, direct-to-consumer advertising, Internet communications, and relationship marketing, according to Bashe, who is forecasting $1 billion in revenue within the next four to five years.
Bashe will devote the next couple of weeks to establishing his vision of the marketplace, as well as more mundane, “structural” concerns, like finding desks and chairs for the new office in Metuchen, NJ. Come Jan. 1, he will hit the ground running in seeking appropriate acquisitions to grow the new company, he said. The exact order of companies targeted for acquisition hasn’t been determined yet, but the common factor will be companies with entrepreneurial drive, an element he wants to preserve.
“One of the things we find in building a new organization like this is that the people who have the passion to succeed are the people who have built businesses, have a sense of ownership, and are eager and willing to collaborate with other people around the world,” he said. “We need to allow these businesses to eat their cake and have it too.”
“The companies we target may not be wholly healthcare businesses,” Bashe added. Healthcare communications overall is relatively young, and even nonhealthcare consumer background in marketing services would be invaluable to the new company, he said, although the ideal would be companies with expertise in both areas.
Another early priority will be to tap GTCR’s vast experience and knowledge base. “One of the elements in terms of value is the best practices and shared knowledge,” said Bashe. “[GTCR has] 30 to 40 successful entrepreneurial networks, from hospital systems to relationship marketing companies to marketing services companies. They have 10 different companies in the healthcare sector alone. We can get deep and study the customer base of those companies to find out about the critical issues they face.
The healthcare company marks the third marketing services company funded by GTCR in the past 18 months. Hawkeye Communications, New York, led by former Rapp Collins Worldwide CEO Steve Dapper, was created last January and has done four acquisitions to date, most recently the $11 million Cadmus Direct Marketing, Charlotte, NC, which it acquired in September. Hawkeye also acquired a sales promotion and field marketing firm, a college marketing company, and a fulfillment and customer care company earlier this year.
GTCR invested in Lighthouse Holdings LLC, Chicago, in late 1998. The company, chaired by Terry Graunke, who previously ran a successful information technology company, specializes in the buyout and consolidation of marketing services companies; its acquisitions in 1999 have included Davidson Marketing, Chicago, and Communicator, a London-based direct marketing agency.
