Relevate Health Group and Arteric have completed what the companies are calling a “strategic combination.” The deal pairs a local-market-focused powerhouse with one of the industry’s most highly regarded digital shops, creating an entity that should prove bigger than the sum of its parts.
Arteric CEO Hans Kaspersetz, who becomes Relevate’s chief innovation officer and a board member, characterized the unification of the two agencies “a real peanut-butter-and-chocolate moment.” He played up the flexibility of the combined offering: “Our ability to go national and Relevate’s ability to go local creates a unique combination that will allow us to bring many new services and products to market much faster for our clients.”
Relevate CEO Jeff Spanbauer agreed, adding that Arteric’s digital skills will allow the company to think even bigger, particularly in the realms of data analysis and machine learning. “Arteric, with their software capability, is going to allow us to program and automate and bring things to market faster,” he said. “That is something our clients will benefit from. HCPs will get locally relevant information faster.”
Cincinnati-based Relevate generated $18.3 million in North American revenue during 2019, up 23% from the year prior. The firm counts Pfizer, Merck, Genentech and AstraZeneca as clients. Arteric saw 2019 revenue rise to $5.6 million, up from $5.2 million in 2018, on the strength of work from Bristol Myers Squibb, Amgen and Greenwich Biosciences. The combined company will employ 130 full-timers.
Under the terms of the deal, New Jersey-based Arteric will become a part of Relevate, Spanbauer said. “Technically we purchased Arteric, but we look to operate both firms independently for at least the near future. Arteric has the national focus, we have the local focus and we will find ways to leverage each other’s capabilities. That makes it more strategic than an acquisition-type of thing.”
To complete the deal and fund anticipated growth (which could include additional acquisitions), Relevate received a cash infusion from private equity firm Mountaingate Capital. Financial terms were undisclosed.
As for what comes next, Spanbauer said that Relevate is in listening mode for the time being. “We spent last week talking to clients. We have a lot on the Relevate side who want to meet Hans and Arteric, and we have Arteric clients who want to meet Relevate and learn about the complementary capabilities the firms will offer,” Spanbauer noted. “We want to spend the next 90 days introducing clients to our teams and getting their feedback, learning about their needs and determining how to help them grow.”