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“Generation
provided invaluable contributions to our Board
of Directors. They have stimulated VRC to build
a more competitive better business. They are
great at introducing best practices across their
investment portfolio”
Sean Casey, CEO
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 Case Studies
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Background
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Dr.
Sean Casey founded Virtual Radiologic Corporation
(NASDAQ: VRC) in 2001 to enable radiology practices to outsource
their overnight coverage. Driven by an aging population,
improvements in diagnostic capabilities and the increasing
usage by physicians as a preventive screening method,
diagnostic imaging procedure volume, such as CT-scans,
is growing at an estimated 14% per year, while the
number of radiologists is growing at only 1.5 % per
year. This imbalance, coupled with technology improvements
and reliable broadband connections, spurred the creation
of an entirely new field of healthcare services: teleradiology.
By 2004, VRC was a leading
provider of teleradiology services to radiology practices
and hospitals nationwide. VRC provides ‘remote’
reading of diagnostic images through a network of
radiologist located throughout the United States.
VRC’s technology infrastructure enables radiologists
to read in any location, rather than from a central
reading room, and leverages the power of a large group
of radiologists to provide 24/7 coverage for customers
with read turn-around times of less than 30 minutes.
The company recognized a need for equity capital and
strategic guidance to accelerate growth, and solidify
its leading market position.
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Generation’s Involvement
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Generation
had identified these strong secular trends and thus,
had been proactively targeting the teleradiology industry
for two years prior to making an investment in VRC.
Given VRC’s scalable technology platform, experienced
management team, and emphasis on quality, Generation
felt that VRC was the ideal company to partner with
in the industry. As a result, Generation Partners made an investment in the Company in May 2005 as the Company’s
lead investor with two Generation professionals joining
VRC’s Board of Directors. With Generation’s
capital and guidance, VRC accelerated hiring, brought
in technology experts to augment the company’s
workflow systems, refined the corporate structure
to better comply with corporate practice of medicine
statutes, assisted in the implementation of strategic
initiatives, and negotiated terms with key vendors.
Generation worked with Dr. Casey and his team to develop
and implement financial, operational, and technical
processes to help VRC manage its tremendous growth.
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Outcome
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Since the Generation investment, VRC has
achieved profitability and has become the fastest growing
company in this industry with revenue growth of over
80% in each of the last four years. In November 2007, the Company had its Initial Public Offering, with Goldman Sachs and Merrill Lynch as co-lead managers. The Company currently trades on NASDAQ under the ticker symbol, "VRAD." The company is
currently the largest provider of distributive teleradiology
services in the United States.
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