Jim Chandler is a familiar name to just about anyone working in the locum tenens industry. With 18 years of experience in the biz, he’s seen and done it all, working his way up to become the founder of a successful agency that was acquired by one of the bigger firms.
In recent years, Chandler sat on the board of directors of the National Association of Locum Tenens Organizations while serving as senior vice president of Health Carousel Locum Tenens, which changed its name to Caliber Healthcare Solutions earlier this year.
Today, Chandler is out of the agency game but still involved in locum tenens, a change of fate that may have been written in the stars.
In his most recent agency role in 2019 (aka, “the before times”), Chandler was president and founder of Onyx M.D., a successful physician staffing firm looking to scale its business. One avenue he entertained was a merger or acquisition, a path that eventually came to fruition. As fate would have it, Quadriga Partners, LLC, Chandler’s new outfit, was the M&A advisory firm Onyx M.D. chose to support its acquisition by Health Carousel.
Denver-based Quadriga is a middle-market investment bank offering M&A, capital raising, and strategic advisory services exclusively to healthcare companies like Onyx M.D. In his new position at Quadriga, Chandler is uniquely positioned to help the firm increase its activity in the locums space with his oodles of experience guiding the way.
“Having Jason and the [Quadriga] team come alongside me and forging a deep relationship within the deal crucible together is something I will never forget,” he says. “We earned our stripes together in that foxhole.”
After working directly with managing partner Jason Ficken for over a year on the Onyx acquisition, Chandler intimately came to understand Ficken’s business philosophy.
Battling the Bulge
That yearlong “get-to-know-you” process may seem like a long time to some. Ficken points out that 12 months would be too burdensome for many banks, including the bulge bracket banks — large investment banks like Goldman Sachs, Bank of America, and Morgan Stanley — that focus more on deal volume than deal outcomes. Such was his vision when he started Quadriga nearly 15 years ago after working for one of those big banks he now counts as competitors.
“I think it’s an important point of differentiation. Many people come to potential clients and say, ‘Here’s what your business is worth,’” Ficken says. “We start with, ‘Why do you want to sell? What are you trying to accomplish?’ If we can better understand the goals and motivations that someone has for pursuing a transaction, we can have a solutions orientation versus a transactional orientation. That approach changes the paradigm for both parties.”
The Onyx acquisition is just one of many deals that Quadriga helped consummate. Other recent examples include:
- Advising on the debt issuance of Panorama Orthopedics & Spine Center as well as its alliance with United Musculoskeletal Partners
- The merging of Carolina Cataract & Laser Center and Eyecare Physicians with EyeSouth Partners
- Facilitating the partnership between Professional Placement Resources and Trivest Partners
- Supporting Nova Anesthesia Professionals on its acquisition by Envision Healthcare
- Helping guide OrthoNebraska on its collaboration with InTandem Capital Partners
Chandler and Ficken became fast friends while completing the deal with Health Carousel. That doesn’t surprise either of them; Ficken says many of his closest friends were once clients.
“Following that process, Jason and I would get lunch once or twice a quarter, discussing life in addition to the continued merits of the Onyx acquisition,” Chandler said. “Then our lunches got longer, and the conversations shifted to leveraging my experience and expanding on what Quadriga could offer in the healthcare staffing sector — locums, more specifically — and parlaying that experience to grow and scale the firm.”
Ficken eventually asked Chandler to deepen his roots in the Rockies and join Quadriga as its chief operating officer. It was the right opportunity at the right time for him, and Chandler decided he couldn’t pass it up.
Why Education is Critical to Quadriga’s Success
Ficken opened Quadriga’s doors in 2009 with an ambition to create a specialized firm with diverse backgrounds. He intended to be laser-focused on teaching clients about the possibility of accelerated growth and tailoring solutions to help them get there.
He says he cares more about getting to know clients like Chandler so he can help them both succeed.
“For us, it really comes down to two things: we have to add value to a situation, and we have to deliver a viable solution,” Ficken explains. “We’re compensated economically when a value has been realized. Although rare, even if a deal isn’t consummated, that’s not the end of the world. It comes down to whether we can help inform our clients so they can make the best decision possible.”
To prove the point, Ficken spoke candidly about a deal with an orthopedic practice that closed north of $200 million. The process began with a pitch against six other competitors. Through their due diligence, Ficken and his team learned the practice wanted to expand by allowing their partner-track physicians to buy in. There was a problem, though. The practice was actually “too successful” then, and new partners couldn’t afford to buy partnership interests at the current equity value.
Quadriga pitched this idea of “putting debt on the practice” and essentially distributing that debt to the partners, lowering the business’s equity value. It might sound counterintuitive, but not when Ficken explains it.
“Think of enterprise value as ‘equity value plus debt.’ If you increase debt, you’re decreasing the equity value but not changing the firm’s enterprise value,” he explained. “We put a prudent amount of debt on the books, effectively monetizing a portion of the existing partners’ equity. These partners experienced a liquidity event while allowing other productive partner-track physicians to buy in at an affordable share price, and everyone loved it. This solution facilitated significant growth in the practice, leading to a transaction resulting in a strategic partnership and a transformative proceeds distribution a few years later.”
The experience with the firm is an example of how complex the M&A space can be and why Ficken feels it’s critical to explain everything from broad concepts to the minutiae with forceful clarity.
Ficken says Quadriga chooses to work with “open-minded” clients, which explains why he hit it off with Chandler. Ficken said that after talking to Chandler, it was abundantly clear that Onyx had some fundamental issues he and Quadriga could help address.
“Jim was a CEO and CFO — that was part of the issue at Onyx. He wore multiple hats,” Ficken reveals. “It just wasn’t sustainable or marketable. We wanted to find the right partner who saw this and other deficiencies as upside opportunities.”
Chandler and Ficken both agree the desire to transact does not always translate to the ability to transact.
“If you looked at 10 clients, I would say maybe two have it figured out. They know what they want to do and who to sell to, but even in those situations, they appreciate our guidance and support,” Ficken says. “Few clients recognize how all-consuming a transaction is.”
Solutions Orientation > Transactions
Few investment bankers know firsthand how time-intensive a transaction can be better than Chandler — he’s worked these deals now from both sides and is quick to praise his team over himself.
“The guys here are the true healthcare investment bankers and M&A advisors,” he says. “They are consummate professionals. I’m fortunate to contribute operational expertise to deal processes when needed. But I also have 18 years in locums as an operator, and not leveraging that experience to enhance client outcomes would just be silly.
“That was one of the things that Jason’s team taught me. There was a lack of understanding and hands-on experience [about locums], and many buyers were looking for tested leadership teams and know-how.”
In those instances, there might be strategic investors like Health Carousel in the Onyx transaction, sponsors with a platform they have already invested in, or sponsors with a thesis wanting to enter the space, all looking for locum investment opportunities. These are opportunities for Ficken, Chandler, and Quadriga to come in and help inform clients about the buyer landscape and solutions.
“We continue to see significant investment interest in the locum tenens space,” Chandler says. “That makes it even more important we go through an extensive process to identify the right partner that provides the best solution to achieve our client’s goals.”
It’s not enough to complete a transaction just to put another feather in his cap, FIcken says. He wants to build relationships — sometimes even close friendships — that extend far beyond the lifecycle of a singular transaction.
“There is a solutions orientation to everything we do,” Ficken says. “We want to deliver outlier outcomes that align with our clients’ goals. We feel we can add significant value beyond just the transaction.
“For us, what works is coming in and being genuinely interested in what [clients are] trying to accomplish, genuinely knowledgeable about what the market will bear, and genuinely interested in how we solve their problems.”
Ficken’s desire to succeed this way comes from a deep affection for the process. Quadriga chooses to partner with clients, knowing that the end result won’t come easily – or, necessarily, quickly.
