Pinnacle Purchases Stake in Healthcare Lender
Pinnacle Financial Partners has acquired a 30 percent stake in a Florida-based healthcare lender with a national footprint and pre-tax margins of 50 percent. Nashville-based Pinnacle paid $75 million in cash and debt for its stake in Bankers Healthcare Group (BHG), which was founded in 1992.
BHG employs a team of originators to make working capital, equipment or acquisition loans, among others, to healthcare companies of all types and then sells stakes in those loans to a network of 200 community banks. The company has funded more than $1 billion in loans since 2011 and last year booked a pre-tax profit of $49 million on revenues of $98 million.“BHG’s reputation in the medical community, growth trajectory and solid leadership make for a strong partnership,” said Pinnacle President and CEO Terry Turner. “We have enjoyed partnering with BHG over the last few years on several initiatives and look forward to working more closely together. We are particularly excited about incremental potential to distribute our financial services through their national distribution channel.”BHG is based in Davie, Fla., and runs its financial headquarters out of Syracuse, NY. The company also runs sales offices in New York City, Denver and Washington, DC, and has a total staff of more than 200. Principals Al Crawford (chairman and CEO), Bob Castro (president) and Eric Castro (COO) have agreed to stay with the company for "an extended period of time" while Pinnacle has the right to designate one of the company's four board members.Turner said the BHG stake purchase won't have a big impact on Pinnacle's $6 billion balance sheet but is mainly about bringing in more fee income from the loan syndications. Turner and his team expect the profitable revenue stream from BHG to add between 7 and 9 percent to their 2015 earnings per share, which analysts have pegged at $2.59.Turner and Crawford said they will look for opportunities to expand BHG's services. Pinnacle spokeswoman Nikki Klemmer said the bank already is offering credit cards through BHG's network. Future products to cross-sell might include traditional bank products such as deposit accounts and cash management services.
Banker's Healthcare Group
Pinnacle Financial Partners