Atlanta firm buys majority stake in revenue cycle manager

Hendersonville firm founded in '04 by Quorum veteran

A Hendersonville-based revenue cycle manager has been recapitalized and given a shot of growth capital by a Georgia investment firm.

Alexsar Capital of Atlanta has taken a majority stake in Citadel Outsource Group, which has been handling payment collection for hospitals around the Southeast and beyond since 2004. Founder and CEO Rick Shedden has retained a significant minority holding, and several other managers also still own small stakes in the company, which has collected $340 million for clients. Shedden launched Citadel after a hospital finance career that took him to a number of HCA hospitals as well as through various positions at Quorum Hospital Resources.

"Hospitals love collecting the low-hanging fruit, but once it gets 30 days past due, it makes much more sense for a company like Citadel to handle billing issues," said Adam Landa of Harpeth Capital, who with Chuck Byrge advised Citadel on its financial options. "This will give Citadel some capital to ramp up its marketing."

Investing alongside Alexsar was Minneapolis-based Northstar Capital, which provided debt funding and took a small equity stake. In addition to Harpeth Capital, Shedden was advised by Tom Sherrard and Greg Pease of Sherrard & Roe.