GRAND RAPIDS — An Atlanta-based pharmacy company that serves long-term care facilities and senior housing communities entered the Michigan market by buying a majority stake in TruCare LTC Pharmacy LLC in Grand Rapids.
TruCare LTC now operates as Guardian Pharmacy of Michigan following the deal with Guardian Pharmacy Services LLC.
The deal gives the former TruCare LTC the backing to grow across the state. The deal came after the company sought a partner with an operating model “that could make us stronger in all areas that we do,” said John Capotosto, a partner and co-founder of the business with Nathan Stauffer.
Capotosto oversees sales and marketing and Stauffer handles operations. Ron Schafer serves as interim president of the company.
Guardian Pharmacy Services fit “extremely well” with TruCare LTC, both culturally and operationally, Capotosto said.
“It lets me to do what I’m really good at, and allows Nathan to do what he’s really good at, which is running the operations and taking care of clients,” he said. “They give us the support in multiple areas of expertise that we can spend a decade trying to access and grow ourselves. In not doing that, we’ll be able to spend the next 10 years growing.”
The renamed Guardian Pharmacy of Michigan has contracts to supply pharmacy medications to 120 assisted living centers around the state and has grown “dramatically” since the partners formed the company four years ago, Capotosto said.
Guardian Pharmacy of Michigan recently completed a new 17,000-square-foot facility on 29th Street that provides nearly four times the space of its existing building, offering plenty of room to grow. The company, which employs 20 people and plans to move into the new facility in October, also aims to expand its footprint in the state.
“The long-term plan for this market is for us to fill up the new facility,” Capotosto said. “Our facility will hopefully be as successful as we have been in the last four years, and we would absolutely look at other markets in Michigan with Guardian in the future.”
Guardian could pursue either additional acquisitions or establish new locations in Michigan, “whatever makes most financial sense at the time,” Capotosto said.
Alex Ferguson, vice president of business development at Guardian Pharmacy Services, cites partnerships in Nashville, Tenn. and Madison, Wis., where local operators followed up an investment with expansions a year or two later to grow into other markets of those states through acquisitions or opening new locations.
“We can do it either way,” he said. “We’re opportunistic.”
Guardian Pharmacy Services, founded in Atlanta in 2004, has 37 locations in 26 states across the U.S. that collectively serve more than 125,000 residents at senior living facilities, assisted living centers and nursing homes.
The company seeks to connect with what Ferguson describes as “like-minded” entrepreneurs who want to grow and could use the back-office support Guardian Pharmacy Services provides to run the business in areas such as human resources, payroll, information technology, and data analytics.
Guardian typically acquires an 80-percent stake in companies. Local operators who retain a minority stake in the business are given autonomy to run the operations based on local market needs and demands, Ferguson said.
“The premise behind Guardian is let’s find like-minded entrepreneurs and let’s develop a support offering in Atlanta that can alleviate a lot of the business functions, and help them gain scale and efficiencies that the bigger companies have, but at the same time enable them, empower them and allow them to be autonomous as it’s related to taking care of customers, because that’s what’s gotten them the business that they’re earned thus far,” he said. “We partner with them and together, off we go. We provide them a lot of support to give them more time, money (and) energy to continue to grow in the markets that they compete in.”
The difference between how Guardian Pharmacy Services operates and a traditional franchise model is that the company does not charge a fee or revenue sharing. It instead shares in the earnings the local operator generates.
“The design of the model was to align our interest,” Ferguson said. “If the business does well, we all do well. If the business struggles, we all struggle.”
Guardian Pharmacy Services views Michigan as an “attractive” market to enter, Ferguson said. Michigan ranks 10th in the U.S. in the number of residents who are 85 years old or older, he said.
The company also has several contracts with national senior housing operators that “happen to have a very large number of accounts or communities in Michigan,” Ferguson said.
“It’s an attractive marketplace where we have a lot of good relationships from Guardian and national accounts,” he said.
As Guardian sought to enter the Michigan market, it identified TruCare LTC as business partners who “definitely fit that mold of folks that want to continue to grow and expand their business,” Ferguson said.
The deal between Guardian and TruCare LTC closed July 1. Terms were undisclosed.
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