Case History

"Charterhouse was behind us all the way. Together we embarked on nearly a dozen acquisitions and built a respiratory products company into a diversified specialty healthcare provider with national scope. The MP TotalCare buildup is an excellent example of Charterhouse's successful dual strategy of partnering with management and executing a buy-and-build plan. "

-- Howard Deutsch

In late 1997, Charterhouse identified the
respiratory services market as a key sub-sector
within healthcare services and aggressively
searched for a visionary operating executive to
assist in evaluating the market and looking for investment opportunities. The firm utilized its network for sourcing Charterhouse Entrepreneur prospects and was subsequently introduced to Howard Deutsch, a former Executive Vice President, General Counsel and Director of Lincare Holdings, Inc.

In early 1999, Howard introduced Charterhouse to MP TotalCare, then a $19 million revenue company focused almost exclusively on the distribution of respiratory medications. Howard became familiar with the company during his tenure with Lincare and he viewed the business as an ideal platform for consolidation in the specialty pharmaceutical and medical supplies distribution arena. Charterhouse was confident in Howard's ability to execute an acquisitive growth strategy because he had been involved with over 100 acquisitions during his career at Lincare. On November 30, 1999, Charterhouse acquired MP TotalCare and Howard became the Company's Chairman.

Over a six year period, Charterhouse, Howard and the Company's senior management team built MP TotalCare organically and through acquisitions to become one of the nation's leading chronic care specialty healthcare suppliers serving the senior population. The Company provided diabetes testing supplies, wound care supplies, urological products, incontinence supplies and respiratory medications directly to its customers through the mail. MP TotalCare's mission was to improve patient outcomes and quality of life through a comprehensive range of value-added services by:

• providing "high-touch" education, counseling, and prescription regimen compliance programs;
• operating multiple call centers; and,
• providing emergency same-day pharmacy delivery services

MP TotalCare also managed, on an outsourced basis, the pharmacy operations for third parties including national retail pharmacies, insurance companies and healthcare service providers.

Under Howard and his team's leadership, and with Charterhouse's financial and strategic support, MP TotalCare completed eleven acquisitions between 2001 and 2004, diversifying its revenue base to include products and services for health conditions relating to diabetes, wound care, paralysis, incontinence, and ostomy. HealthScript, Inc., Express-Med, Inc., Medical Holdings, Inc. (DS Medical Inc.) and Gericare Providers, Inc. are just a few of the companies that were part of MP TotalCare's build-up. The MP TotalCare management team focused on creating operating efficiencies, maintaining a diversified business and enhancing customer care in order to create a leading middle-market service business - as well as to navigate through a challenging regulatory and reimbursement environment.

Under Charterhouse's ownership, MP TotalCare grew tenfold - to approximately $200 million in revenues. The business was sold in October 2005 to another private equity firm (which merged MP TotalCare with CCS Medical, Inc. to form one of the nation's leading suppliers of direct-to-consumer medical products and services). Over the same period, the Company's customer base grew from approximately 5,000 in 1999 to over 135,000 individuals in 2005.