Author: John Matthews

We are excited to announce the hiring of Matthew Sobieralski as Chief Financial Officer at Integrated Foot & Ankle Specialists (“IFAS”). Matt is an experienced business development and operating executive based in the greater Philadelphia area. Most recently, he served as Chief Operating Officer and Vice President of Business Development at Omni Ophthalmic Management Consultants (“Omni”).

Prior to Omni, Matt was the Director of Mergers & Acquisitions at Pivot Physical Therapy for two years. Matt was also Senior Business Development Analyst at Physicians Endoscopy, where he worked after several years in hedge fund and investment banking roles.

IFAS was established in 2022 as a consolidation strategy in the podiatry and foot and ankle surgery industry. It has grown to 16 locations across eight counties in Pennsylvania and New Jersey, employing over 80 doctors and staff members. IFAS is in active discussions to expand its network of practices in the Mid-Atlantic and Northeast with potential doctor-partners in Pennsylvania, New Jersey, New York, Delaware, Maryland, and Virginia.

Algus Packaging LLC (“Algus” or the “Company”) reached a significant milestone last year as it placed two key members of its senior management team. These critical hires will be a central component of Algus’ evolution as a leading manufacturer of blister packaging and related production equipment.

Leslie Parker joined Algus in May of 2023 as Vice President of Operations and has responsibility for thermoforming and machine business unit operations, machine shop, and general facilities. For the majority of Leslie’s professional career, she led Rayovac’s Battery Packaging and Distribution Center in Dixon, Illinois. Leslie comes to Algus with experience in annual operating planning, production planning, engineering, quality management systems, and continuous improvement.

John Mathis joined Algus Packaging in September of 2023 as Vice President of Finance and has responsibility for directing Algus’ accounting, finance, and IT related activities. In addition, John oversees company policies, contracts, internal controls, financial and cost analyses, budgeting, and forecasting. Prior to joining Algus, John held Controller-level and Chief Financial Officer roles at multiple manufacturing companies with the majority of his career spent at Caterpillar in escalating roles of responsibility within the finance function.

At Mereo, strengthening management teams is an essential tenet of our investment strategy. We look forward to collaborating with Rod MacNeille, Algus’ Chief Executive Officer, and these key hires in driving continued value.

We are pleased to provide a brief update on our activities over the past year. Headquartered in Conshohocken, PA, Mereo Capital Partners (“Mereo”) is focused on opportunistic and thematic investments in lower middle market companies which have the potential for operational improvement.  Since inception in January of 2021, Mereo has focused on the following:

1. Building a brand consistent with its core values of integrity, technical excellence, teamwork, passion & perseverance, and humility. 
2. Sourcing opportunities through our three-pronged process which includes our network of advisors and partners, lower middle market intermediaries and a tech-enabled direct outreach effort all resulting in less competitive processes.
3. Closing new investments and implementing post-close value creation plans with the assistance of our operating advisors. 

We are pleased to have closed on four transactions within our core sectors: healthcare services, aerospace and defense, business services and industrial. We actively work our network to source these opportunities on a proprietary or less competitive basis. We reviewed over 600 opportunities in 2023 and while deal flow remains robust, we are mindful of today’s economic uncertainty and volatile capital markets.  We believe we have invested in sectors and companies which will remain resilient and grow regardless of the economic outlook.  Given the increase in interest rates, we are seeing an increase in opportunistic/special situations, which we expect will provide new opportunities at potentially attractive valuations.  We note that our businesses have modest or no leverage, and therefore are not impacted by the rate increases over the past year.  

At Mereo itself, we congratulate Adam Bowie on his promotion to Principal.  Adam joined Mereo at its inception.  He was previously at L2 Capital Partners, Citigroup Investment Banking and the US Marine Corps.  We also welcome Scottie Miller, who joined Mereo as an Associate this month.  Scottie was most recently at Jefferies Investment Banking. 

Below are brief descriptions of our portfolio companies:

Swish Dental LLC

Swish Dental LLC (Swish) is a leading dental services organization founded by a prominent female dental practitioner, Dr Viraj Desai in 2017.  Swish provides its patients with the highest-quality clinical care in a tech-enabled, spa-like experience which caters to the growing affluent demographic of the greater Austin, Texas MSA.  Since Mereo’s convertible preferred investment in October 2021, Swish has grown from nine to fifteen locations, including the recent opening of a location in Houston.  The Company’s strategy of de novo-driven growth is benefiting from a consistent, repeatable process, leading to strong returns on investment.  In 2023, Mereo worked with management to recruit and enhance its finance function, allowing for more robust reporting of financial results and operating metrics.  The Company finished 2023 with revenue growth of 25%, a strong cash balance and no debt, providing momentum and a good foundation to accelerate its growth in the Austin/ San Antonio/Houston corridors.

Luna Labs LLC

On March 8, 2022, Mereo made a convertible preferred stock investment to facilitate the corporate divestiture of Luna Labs USA (“Luna”), from Luna Innovations Incorporated (NASDAQ: LUNA).  Luna Labs conducts advanced technology research for government agencies such as the U.S. Department of Defense, National Institute of Health, Department of Energy, and for prime government contractors such as Boeing and Lockheed Martin.

Luna concluded 2023, its first full calendar year of operations, on a high note with a record backlog of contracts, strong free cash flow and debt paydown, and significant progress on its commercialization initiatives.  Of note, Luna is in active discussions with pharmaceutical companies regarding NanoVac, a novel mRNA delivery technology, which offers superior delivery and efficacy outcomes relative to current technologies. Luna is also in active dialogue with companies in the aerospace, marine and energy industries regarding GC Blockade, a new coating technology which significantly reduces repair costs and maintenance time associated with corrosion around fasteners and bushings. We believe the Company is well positioned to monetize some of its assets in 2024 given the advanced stages of its commercialization efforts. 

Integrated Foot and Ankle Specialists, LLC

Mereo has partnered with Avonwood Capital Partners in a 50/50 joint venture to implement a consolidation strategy in the podiatry and foot and ankle surgery industry via a new company, Integrated Foot and Ankle Specialists, LLC (“IFAS”).   IFAS commenced operations in 2022 and has rapidly grown to become a leading group practice in the greater Philadelphia region.  Our goal is to create a super-regional platform focused on Pennsylvania, New Jersey, New York, Delaware, Maryland and Virginia.

IFAS ended 2023 with the successful acquisition of Quarryville Family Foot Care in Lancaster County, Pennsylvania on December 29, 2023.  During 2023, IFAS also completed the acquisitions of Foot & Ankle Center of Chester County, Berkshire Podiatry, Bryn Mawr Foot & Ankle Center and Lancaster Podiatry. As of the close of 2023, IFAS operates 16 locations in eight counties in Pennsylvania and New Jersey, employing over 80 doctors and staff members.  Given its current pipeline, we expect the growth rate of IFAS to accelerate in the coming year.

Algus Packaging LLC

Algus produces plastic blister and clamshell packaging, and designs and assembles highly-automated factory-floor equipment that the company’s customers use to fill and seal their products.  Since acquiring Algus in November 2022, Mereo has (i) purchased Algus’ two facilities and related real estate at an attractive valuation, (ii) significantly augmented the company’s leadership team, and (iii) substantially improved Algus’ working capital efficiency.  Mereo’s ownership of the company’s real estate is held in a separate “Propco” entity and is financed with a mortgage at an attractive fixed rate.  Algus recruited a VP of Operations and a VP of Finance whose experience includes successful tenures at Rayovac and Caterpillar, respectively. Working closely with Mereo, the company’s management team has achieved net working capital reductions and implemented tight cost controls, allowing for substantial repayment of its credit facilities and development of a significant cash balance. 

Mereo’s priorities for Algus in 2024 include accelerating the company’s sales, improving gross margins through cost and pricing initiatives, and rationalizing the company’s real estate footprint including the potential divestiture of excess land and facilities.

Pennsylvania and New Jersey-based Integrated Foot and Ankle Specialists (IFAS) ended 2023 with the successful acquisition, which closed on December 29, 2023, of Quarryville Family Foot Care in Lancaster County, Pennsylvania. This transaction marked the fifth acquisition of the calendar year, the first full calendar year of operations for the company.

During 2023, IFAS also completed the acquisitions of Foot & Ankle Center of Chester County, Berkshire Podiatry, Bryn Mawr Foot & Ankle Center and Lancaster Podiatry. These transactions grew the business by a total of 11 office locations in Pennsylvania, as well as allowing us to serve patients through relationships with Jefferson Health, Mainline Health, Tower Health, and additional health systems and nursing facilities in Pennsylvania and New Jersey. As of the close of 2023, IFAS operates 16 locations in eight counties in Pennsylvania and New Jersey, employing over 80 doctors and staff members and is expected to continue to expand with our active pipeline for 2024.

IFAS commenced operations in 2022 as a joint venture between Avonwood Capital Partners and Mereo Capital Partners, two suburban Philadelphia-based Private Equity firms with a background in healthcare investing and operations. The joint venture focuses on the continuum of foot and ankle care, as a patient’s ability to ambulate and stay active is a key indicator of overall health and wellness. IFAS is in active discussions to expand our network of practices in the Mid-Atlantic and Northeast with potential doctor-partners in Pennsylvania, New Jersey, New York, Delaware, Maryland and Virginia.

For more information, find us at https://integratedfootandankle.com/join-our-network/.

Company Overview

Mereo Capital Partners (“Mereo”) is a private equity firm that makes value-oriented control and special situation investments in U.S. lower-middle market companies. Headquartered outside of Philadelphia, Mereo’s partners have deep and complementary experience across private equity, private credit, and special situations. Mereo leverages its in-house resources and network of operating partners and industry experts to assist management teams in creating long-term value.

Job Overview

As an Associate on the Investment Team, you will be responsible for leveraging your private equity, investment banking, lending, or similar experience to support the analysis, evaluation, and execution of private equity investments. This role presents an excellent opportunity to contribute to investment decision-making processes and gain valuable exposure in the private equity industry. 

Responsibilities

In the role of Private Equity Associate, you will be responsible for the following:

• Assisting in the sourcing, initial screening and execution of potential investment opportunities 
• Building complex financial models to analyze investment returns and conduct various valuation analyses
• Monitoring and analyzing portfolio company performance and assisting management teams in analysis around strategic initiatives
• Supporting the preparation of investment memoranda and presentations for internal and external stakeholders
• Participating in market research and industry analysis to identify potential investment themes and opportunities
• Assisting in the preparation of investor reporting and presentations for fund updates
• Contributing to the development and enhancement of investment processes and tools
• Supporting ad-hoc projects and initiatives as assigned by senior team members

Qualifications

To be considered for the Private Equity Associate role, you should have:

• A bachelor’s degree with demonstrated track record of academic success
• 1-3 years relevant experience in private equity, venture capital, investment banking, lending, or similar role
• Process management and strong technical/modeling skills
• Self-starter with a solid work ethic and bias for action/high level of initiative
• Ability to communicate ideas clearly and manage relationships with all stakeholders (eg investors, executives, advisors, etc)
• High level of professional maturity and integrity; comfortable working both autonomously and with others
• Excellent organizational skills, attention to detail, and ability to multitask
• Desire to work in an entrepreneurial, fast-paced, and deadline-driven environment
• Visa sponsorship for work authorization is not available for this position
• Must be willing to relocate to the Philadelphia area and work in the office minimum of four days per week

Interested parties should send a resume to Adam Bowie (abowie@mereocap.com) with the subject “Private Equity Associate Opportunity.”

On September 21st 2023, Mereo Capital Partners welcomed our limited partners to our inaugural Investor Conference at Philadelphia Country Club in Gladwyne, PA.  The event highlighted Mereo’s investing activities over the last three years and included outstanding presentations by three of our portfolio company executives.  We extend a special thanks to Rod MacNeille, CEO of Algus Packaging; James Garrett, CEO of Luna Labs; and Teresa Ciaccio, COO of Integrated Foot and Ankle Specialists. We are very pleased with the progress of our four platform investments and look forward to continuing to build great companies and creating value for our investors in the future.

Integrated Foot and Ankle Specialists (IFAS) is pleased to announce that Lancaster Podiatry and Dr. Peter Smith are joining the IFAS family! With 8 acquisitions completed and 15 locations across Pennsylvania and New Jersey, IFAS has quickly established itself as one of the preeminent provider networks in the region for comprehensive lower extremity care. As IFAS grows, we continue to see the positive impacts of consolidation both on doctor’s ability to focus on patient care and on patients’ experience navigating scheduling, managing billing, and accessing the full continuum of care in the foot and ankle space.

IFAS is actively seeking referrals for further acquisitions. If you or someone you know is interested in selling their podiatry practice, we encourage you to learn more about what IFAS can offer at https://integratedfootandankle.com/join-our-network/.

In the meantime, please join us in welcoming Dr. Smith and Lancaster Podiatry to our rapidly expanding network of podiatrists and practices!

Mereo Capital Partners (“Mereo”) is pleased to announce the addition of three summer interns to our team.  Phil Cooke ((23) Phil Cooke | LinkedIn) just completed his first year at the Wharton School of the University of Pennsylvania, pursuing a Master of Business Administration.  Rachel Koffel ((23) Rachel Koffel | LinkedIn) is a rising Junior at Temple University’s Fox School of Business.  Casey Ott ((23) Casey P. Ott | LinkedIn) is a rising Junior at the Robins School of Business at the University of Richmond.  We are excited to have this talented group of students learn more about the private equity industry and contribute to Mereo’s growth and success.

CONSHOHOCKEN, PA. – Mereo Capital Partners (www.mereocapitalpartners.com) is pleased to announce it has acquired the real estate associated with its portfolio company Algus Packaging LLC. The assets are comprised of two separate industrial facilities located at 200 Peace Road and 1212 East Taylor Street in DeKalb, IL, and include a total of 400,000+ sq. ft. of combined manufacturing/office/warehouse space on 86 acres of land. These properties present a significant opportunity for value creation as part of our investment in Algus. As evidenced by the recent nearby development of Meta’s 2.4 million sq. ft. data center and Ferrara Candy’s 1.6 million sq. ft. distribution center, DeKalb County benefits from proximity to Chicago’s western suburbs and the I-88 and I-39 highways. We look forward to working with management to optimize our manufacturing footprint and capitalize on these newly acquired assets. The transaction closed on May 1, 2023. 

We are excited to announce the hiring of Raymond Cho as Vice President of Finance at Swish Dental. Ray is an experienced healthcare executive and is based in Austin, TX. Most recently, he served as Director of Finance & Accounting at Babson Diagnostics. 

Prior to Babson Diagnostics, Ray was the Controller of Action Behavior Centers for four years. Ray was also Senior Financial Analyst at Samsung Austin Semiconductor, where he worked after three years in audit and transaction advisory services.

Swish Dental is a leading and rapidly growing 13-location Dental Support Organization based in Austin, TX. Swish is at the leading edge of rethinking and reorienting the dentist experience to become more comfortable and amenity-centric. The Company is well-positioned with young, affluent professionals and has a successful track record of driving expansion through de novo facilities.