HealthMedia

Healthcare

healthmedia

Company: HealthMedia
Location: Ann Arbor, MI
Initial Investment: March 2003
Acquired: October 2008

Creating the Vision for Rapid Growth by Identifying Relevant Macro Trends

Company:

HealthMedia is a behavioral science technology company that builds and delivers tailored wellness programs for the pharmaceutical/medical device, healthcare and disease management markets. The company’s outcome-driven online model enables behavioral change and leads to lower healthcare utilization and accompanying costs.

Investment Strategy Fit:

At Chrysalis, we focus on enabling technologies and services that benefit from the shift to consumer-directed health solutions, empowering consumers to better manage their own health.

Challenge/Opportunity:

Chrysalis first met HealthMedia while attending the Michigan Growth Capital Symposium in June 2002. At that time, the company was in “turnaround” mode following management turnover and the bursting of the internet bubble, essentially an orphaned company which had previously raised millions of dollars to generate a series of wellness and disease management programs.

Solution:

Chrysalis helped HealthMedia identify the opportunity to leverage the company’s existing program base and follow the trend towards consumer-directed health solutions with the vision of serving larger segments of the population. Together we partnered with the management team to enable this vision and in March 2003 we led a recapitalization of the company as the sole new investor. Subsequently, we worked closely with the HealthMedia team to recruit a seasoned CFO and several other key managers as well as refine the company’s business model. Under the leadership of CEO Ted Dacko and the active guidance of Chrysalis managing director and HealthMedia board member Koleman Karleski, the company migrated from the business it had pursued prior to our investment – customized marketing campaigns for pharmaceutical companies – into an organization that deployed sophisticated knowledge of behavioral change and advanced communications technology to help individuals improve their health and manage chronic illnesses.

Results:

In October 2008, HealthMedia was acquired by Johnson & Johnson as the keystone piece of a new wellness and prevention business platform resulting in an outstanding return to all HealthMedia stakeholders. This highly strategic acquisition for J&J, which Chrysalis facilitated over many years by fostering the interest of numerous suitors, will allow HealthMedia and its team to continue thriving.

“As founder of HealthMedia, Chrysalis worked intimately with me and our management team over five years to capitalize our business and refine its strategy, recruit top executive talent, acquire key customers and distribution partners and ultimately engage an investment banker that helped us identify an exceptional new owner and strategic partner in Johnson & Johnson and realize an extraordinary return on our investment.”
– Vic Strecher, HealthMedia Founder and former Chairman

“In the world of Venture Capital, there is “money” and there is “smart money.” Chrysalis is “smart money.” Working with the Chrysalis team was a true partnership in every sense of the word. From initially recapitalizing an “orphaned” company as the sole new investor to then refining strategy, recruiting talent, acquiring customers and partners and finally engaging an investment banker to facilitate our sale to Johnson & Johnson, Chrysalis was an active and valuable participant every step of the journey. Moreover, they helped us fulfill our mission as our programs are now available to millions and have measurably changed individual behavior, helping improve consumer heath and lower health costs. In the end, we won and they won. What more can you ask for?”
- Ted Dacko, former HealthMedia CEO