HRS Founder Aims To ‘Democratize’ Investment Banking, Exit Process For Home-Based Care Providers

During his time as CEO of home-focused telehealth and remote patient monitoring company Health Recovery Solutions, Jarrett Bauer aimed to help more home-based care providers extend their reach through virtual care.

While home-based care is still top of mind for Bauer, he is now addressing a different industry need. He recently launched Montauk AI, a transaction and investment banking platform that helps companies with real time valuations.

“We’re on a mission to use AI and software to create exits for fractions of the price, and also to allow greater access for people who have not typically had financial resources,” Bauer told Home Health Care News. “There are steps to be successful in selling your business, and that’s the financial review, getting evaluation, making marketing materials, investor outreach, and then the process management piece, and we’re helping entrepreneurs and owners be great in those areas.”

Indeed, one of the key goals at Montauk AI is making investment banking services more accessible.

“My ultimate goal is providing access to these unbelievable services to home health and hospice owners, so that they can get the exits they deserve,” Bauer said.

Broadly, the platform produces detailed financial forecasts, marketing materials and acts as a matchmaker for companies looking for exits and investors looking for deals.

The impetus behind Montauk AI is Bauer’s belief that the traditional investment banking process lacks the resources to effectively serve small- and mid-sized companies. Oftentimes, home-based care providers fall into this category.

“I think a lot of it comes down to experience,” Bauer said. “There are over 14,000 home care agencies, and the majority of them are small organizations. They don’t usually have the experience of doing these financial transactions because they’re so worried about the business that they don’t know. ‘What is the price of my company? Who should I be talking to?’ The real problem we’re solving is that people don’t have this information. AI and software allows us to be able to provide these unbelievable, valuable services that Fortune 500 companies have. We’re bringing it to the average owner for everyday use.”

Though Montauk AI isn’t just for home-based care businesses, some of the early clients have been organizations in this space.

One of these companies is West Palm Beach, Florida-based Independence Home Health, a company that offers skilled nursing, private-duty services, physical therapy and occupational therapy in patients’ homes. The company has four locations and serves the east coast of Florida. It serves over 3,000 patients annually.

For Independence Home Health, Montauk AI has been a tool to aid in the company’s growth efforts, according to CFO Jonathan Dickinson.

“We’re always looking at what is out there in the industry for us to be able to grow either through acquisition … or organically,” he told HHCN.

Independence Home Health was in negotiations with a potential acquisition target when the company began working with Montauk AI.

“[Jarrett’s] team came in and said they could help with an evaluation,” Dickinson said. “An evaluation that was really quick, easy and simple, and alongside key points that would either A, drive the valuation of the company, or B, allow us to understand what we might need from a banking funding standpoint. It was probably a two-and-a-half week timeframe from start to finish.”

Dickinson noted the process allowed Independence Home Health to get a good valuation of the company it was potentially looking to acquire.

“It really put us in a great position to say, ‘Hey, here’s what we’re looking to do as a company and here’s where we want to go,’” he said.

In Dickinson’s view, the arrival of Montauk AI is especially timely given the current state of the home health industry.

“The home care industry probably has more people getting out, just with the state of Medicare and Medicare Advantage plans, what he’s providing is going to be needed more than ever,” he said.

At GrandCare Health Services — a Pasadena, California-based health care organization that includes three home health agencies and serves 10,000 patients annually — Montauk AI provided a new experience for a company that had worked extensively with brokers and investment bankers in the past.

“These aren’t just smart people who know how to produce good powerpoints,” GrandCare Health Services CEO David Bell told HHCN. “Jarrett and a lot of people on his team are also home health experts, so this isn’t regurgitating something that you could have gotten from ChatGPT, it’s really targeted at the market.”

Bell believes that one of the main gaps in the market has been large players’ ability to throw millions of dollars behind high-level investment banking support, in comparison to smaller companies.

“Where there’s a gap is for companies that are in the mid to smaller end of the spectrum,” he said. “The services that are available to help people like that market a business are basically brokers. They show up to calls and yeah, they give you a little bit of advice, but at the end of the day they’re basically just putting you in front of buyers, but it’s your job to deal with the buyers.”

Montauk AI aims to help smaller and mid-size companies, with smaller budgets, help level the playing field.

Additionally, both Dickinson and Bell believe that Bauer’s home-based care technology background is an asset to Montauk AI.

“He really understands what life is like, from my perspective, I think that’s something that I really appreciate,” Bell said. “There’s specific regulatory issues, or specific change of ownership requirements, or specific licensing requirements that he understands deeply. So we’re not getting surprised by those things at the 11th hour when we’re talking to potential buyers. We’re frontrunning those things.”

Ultimately, Bauer has a clear point of reference for what he’s hoping to accomplish with Montauk AI.

“Just like Uber is able to democratize the ride sharing business, we’re trying to say the same thing,” he said.