Dec 20, 2023

SpendMend acquires Rebate Insight to broaden services to hospitals

Buying a California company that works with hospitals and health systems to maximize rebates on supply purchases gives SpendMend LLC greater capabilities to offer customers.

Clients have been telling Cascade Township-based SpendMend that they needed a tool to better identify and manage the varying rebates that suppliers offer, CEO Dan Geelhoed said.

Rebate Insight, based in Ventura, near Los Angeles, developed a software platform that provides real-time management for all of the vendor rebates available to hospitals and health systems. The company "fits totally" with SpendMend's cost management platform, Geelhoed said.

"It's one more offering that SpendMend brings to the hospital that helps align with their goal of these cost-savings initiatives. It's just another tool in our toolbox," Geelhoed said. "It's our slice of helping patients. We aren't doctors, we aren't nurses, but if we can put money back toward a hospital, we impact patient care."

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SpendMend's cost-management platform gives hospitals and health systems deeper visibility and insight into their cost cycles and helps to optimize their spending.

Becoming part of SpendMend will provide the five-year-old Rebate Insight "a great opportunity to serve a larger portion of the health care industry," founder and CEO Tony Garcia said in a statement. "Our teams share a common goal of driving cost-savings and operational efficiencies for our clients, and together, we will be able to deliver even greater value to the healthcare organizations we serve."

SpendMend closed May 19 on the Rebate Insight acquisition. Terms of the deal were undisclosed.

The acquisition adds to SpendMend's capabilities at a time when many health systems continue to operate on thin or negative margins because of higher costs for supplies and labor.

Since publicly announcing the deal this week, SpendMend already is starting to "get a big bubble back from our client base interested in this," said Tim Flynn, vice president of marketing.

"Every single hospital has a cost-savings initiative. It was always the case and it's never been more true than since COVID. Everyone's still suffering from the lingering effect of supply chains issues and COVID, and cost savings is absolutely key and critical right now," Flynn said. "Rebate Insight is just part of this commitment for us to bring in new solutions, whether we’re building them or acquiring them, so that we can serve these cost-savings initiatives at U.S. health care systems."

The Rebate Insight's acquisition was SpendMend's third after securing major investments in spring 2022 from Morgan Stanley Capital Partners and two major health systems, including the venture capital arm of Grand Rapids-based Corewell Health. Morgan Stanley Capital Partners acquired a majority stake in SpendMend.

SpendMend last summer acquired New Jersey-based VIE Healthcare Consulting, a provider of purchase service optimization, and Draper, Utah-based Trulla LLC, a software provider for pharmacy procurement and analytics.

SpendMend employs about 320 people across the U.S., a little more than 100 of whom work at the corporate office in Grand Rapids. The company is on track to record $70 million in revenue for 2023, Geelhoed said.

The company continues to seek additional acquisitions and "we have a full pipeline of potential M&A opportunities," Geelhoed said. "We’re constantly looking for opportunities that strategically fit in that cost cycle, whether it be a tuck-in of a current offering or expansion of an offering of something that we don't do today."

Potential acquisition targets include "anything you see on that side of the ledger where you’re able to save on costs or procurement or supply chain," Flynn said.

"That's where the bulk of our M&A pipeline is right now," he said. "We’re looking at anything that affects OR, anything that affects inventory, anything that affects pharmacy. It's just that whole cycle of the hospital."

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She immigrated from Cuba at 20. She's now led legal teams at West Michigan's largest companies.