Solidus Acquires Medical Newspapers, Inc.
(left to right): Tom McCormick, Mac Hardcastle and J.P. McCormick.
Each month, Medical News reports on important changes or exciting news on the healthcare front. This month, in addition to our regular coverage, we have some exciting news of our own.
Three years ago, Tom and J.P. McCormick purchased Medical Newspapers, Inc. At the time, the publishing company consisted of two monthly publications, Nashville Medical News and Memphis Medical News. Today, under the brothers� leadership, there are six papers in four southeastern states that carry the "Medical News" banner. In addition, the original two flagship papers have grown both in circulation and size.
"The success of these papers has certainly been a team effort � from our advertisers who have supported and encouraged us to our readers who have provided input on the kinds of stories that are important to them to our dedicated staff who have always been willing to go the extra mile to get a story or to work with a client," McCormick said.
"However," he continued, "it has become apparent that to maintain the rate of growth we�ve experienced and to expand the paper into multiple new regional markets will take an infusion of capital larger than my personal investment capabilities."
In order to take the papers "to the next level," McCormick said he began looking for an investor that shared his vision of the company�s growth potential and had the publishing expertise and capital resources to move forward.
"I found that in Solidus and Townes Duncan," he said.
Solidus Company, a private investment firm partnership run by Duncan, pursues a strategy of long-term investments in both the public and private equity markets. Portfolio companies include the publicly traded J.
Alexander�s and Bright Horizons Family Solutions, Inc., as well as early stage private equity concerns like Investment Scorecard, Motricity, New Constructs and American Learning Systems (more commonly referred to as American Graduate School of Management).
Duncan and Solidus have ownership interest in two other publishing companies � Nashville Post and Business Tennessee magazine.
In the Medical News deal, both Tom and J.P. McCormick will retain a minority ownership stake. While Tom has agreed to a three-year consulting contract, he will ease his day-to-day involvement beginning in January.
"As much as I have loved my work with the papers, I�m looking forward to much shorter hours so that I can spend more time with my family and at the lake," McCormick said with a laugh, adding he also plans to pursue a couple of new business projects near Center Hill Lake.
New Publisher and CEO Mac Hardcastle, who has already begun working on daily operations, partnered with Solidus in the acquisition of the papers and has an investment stake in the publishing company.
A Nashville native, Hardcastle said he was intrigued when Duncan approached him about potentially investing in the newspapers.
"He looked at this and really like the model and the quality of the papers," said Hardcastle. "Townes said, �If we buy this, we�ll need someone to run it, are you interested?�"
Although Hardcastle agreed, he now laughingly admits that he really thought he�d hire someone else to handle day-to-day operations.
"I ended up doing what I do for a lot of clients which is creating and administering a customer satisfaction survey," he continued. "The numbers were just so high � really it was the advertisers and the customers of Medical News that sold me on being CEO.
In announcing the changeover, Hardcastle stressed Solidus� commitment to the companies they buy.
"Solidus is a buy-to-own investment firm rather than a buy and flip company," he said. "We fully intend to continue the growth strategy Tom began and anticipate doubling the number of geographic markets in the next two years and growing exponentially after that."
In addition to Nashville and Memphis, other current markets include Acadiana (the southwest region of Louisiana), Birmingham, East Tennessee and Mississippi. Initial growth plans will remain focused on other southeastern markets with a plan to eventually expand the geographic reach nationwide.
"I have been truly gratified by the experience of owning Medical Newspapers," said McCormick. "I always felt like the company�s success went far beyond any management decision I might have made and instead was because the healthcare community really took ownership in having a publication that got to the root of their clinical and operational concerns.
"It is my belief that under the direction of Mac and Townes the papers will continue to improve and grow," McCormick concluded.