Jay Roberts, chief financial officer of AdvantEdge Healthcare Solutions, has more than 25 years of senior finance experience, 20 years as a CFO. Roberts has gained strong expertise in SEC reporting, accounting, M&A, and corporate-development transactions for health care technology companies, successfully completing over 100 corporate financing acquisitions and exit transactions.

This knowledge has proven a good fit for AdvantEdge, which provides medical-billing services for physician groups, hospitals, surgery centers, and behavioral health agencies, and was founded in 1999 by long-term veterans of the health care IT and medical-billing sectors. Roberts recently spoke with CFO Studio On-Camera about the dynamics of capital markets in health care technology. Below are excerpts from that conversation.

Andrew Zezas: Jay, it’s so nice to have you here on CFO Studio.

Jay Roberts: Andy, thank you very much for having me. I appreciate it.

Zezas: So, you’re in health care technology. Talk to me about the regulatory environment. How has the current environment impacted companies’ ability to secure bank financing specifically for growth funding?

Roberts: I’ve been in health care IT for 20-plus years, and over that time, the regulatory environment has become a little bit more challenging. Certainly, in the last several years, Dodd-Frank had a big impact on securitization of debt financing, and what we’re seeing today is: While the cost of capital in this current environment is very attractive and very competitive, we’re also finding that covenants associated with bank financing have become more difficult. We’re also seeing that, while there’s a lot of capital to deploy and there’s still a good opportunity to gain yield, a lot of the traditional lenders have still been challenged to find good opportunities because of the economic climate.

Zezas: How about private equity and venture investors?

Roberts: The venture and the private equity community has been very interested in coming into the space, specifically into health care IT and services. We’re finding that, in particular, the private-equity investors are coming to health care providers. So we’re seeing clinical labs, as an example, where that particular sector has had a lot of interest by venture and private equity investors.

Zezas: On the subject of growth, will your company’s growth be more from upselling to existing customers new products and services, or acquiring new customers?

Roberts: We want to focus on our existing client base and expand within that existing client base. We do more and more with hospital-based clients, and that’s been a big part of our growth strategy over the last several years. We also have a very strong initiative relative to growing organically with new-customer acquisition. We’ve completed eight
acquisitions in the last five years.