Centerre Healthcare Close $30MM Series B Financing

The Clayton-based firm is currently the only company in the nation exclusively dedicated to developing and operating specialty rehabilitation hospitals in partnership with leading general acute care hospitals. Centerre will use the proceeds to support ongoing operations and to develop new inpatient rehab hospitals, including one locally in partnership with St. John’s Mercy Medical Center, due to open in West County in 2007

The $30 million raise is expected to fully fund Centerre’s business plan. Three Arch Partners of Portola Valley, CA, led the new round of financing. Three Arch Partners is one of the pre-eminent venture capital firms investing in health care services in the country, with $1 billion of capital under management. Centerre’s five existing venture capital investors all participated in the round at their pro rata levels.

RiverVest Venture Partners, a St. Louis-based venture capital firm, is one of the investors in Centerre. RiverVest focuses on seed, early-stage and selected late stage life sciences investments. Tom Melzer, Managing Director of RiverVest, points out that St. Louis has been home to several of the leading national rehabilitation and long-term acute care hospital companies over the past twenty years. “Normally, we don’t invest in services, but with Lewis and the Centerre corporate team contributing so much to that success, we were easily motivated to get involved.”

Lewis served as the senior operating executive of St. Louis-based RehabCare in the mid-to-late 1980s, during that company’s start-up and early development stages. RehabCare has been the leading provider nationally of contract management services for inpatient rehabilitation units since 1987. It became a publicly-owned company in 1991. In the mid-1990’s, RehabCare diversified, becoming one of the nation’s leading providers of outpatient rehabilitation as well.

Lewis later co-founded and served as COO of Advanced Rehabilitation Resources. ARRI quickly became the second largest and fastest growing contract manager of inpatient rehab units in the U.S. ARRI was acquired by RehabCare in late 1993. Several of Centerre’s key leaders were employees of ARRI.

Lewis subsequently co-founded and served as COO of Intensiva Healthcare, a national leader in specialty long-term acute care hospitals. Intensiva pioneered the hospital-within-a-hospital delivery model. Many were located within large, market-leading general acute care hospitals. The company went public in 1996, and was acquired by Select Medical in late 1998.

Centerre’s co-founder, John Keefe, served as CFO of Intensiva. Tony Torrente, Centerre’s Chief Development Officer, served in that capacity at Intensiva. Torrente was also a Development officer of Advanced Rehab and RehabCare. And a number of other Centerre executives played key roles at the earlier companies.

Lewis comments, “Centerre has had the good fortune to attract many of the stars from the earlier post acute care companies. This was partially because those companies had built a deep pool of talent in St. Louis—one of those proverbial well-kept, or maybe just little-known, secrets.”