Pharos Capital Invests in Beacon Specialized Living Services, Inc.

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Pharos Fund III Makes its Fifth Healthcare Investment

DALLAS & NASHVILLE, Tenn.–(BUSINESS WIRE)–Pharos Capital Group, LLC (“Pharos”), a private equity firm based in
Dallas and Nashville, announced that it has partnered with Founder Ken
Ratzlaff and his family by making an investment in Beacon Specialized
Living Services, Inc. and its affiliates (“Beacon” or the “Company”).
Beacon is the largest for-profit provider of residential healthcare
services in Michigan to individuals with intellectual and developmental
disabilities, mental health and substance abuse disorders. Terms of the
transaction were not disclosed.

As part of the transaction, industry veteran Darren Hodgdon is joining
Beacon as CEO and Mr. Ratzlaff will take on the roles of Director and
President. Mr. Hodgdon is a seasoned healthcare executive who recently
led strategy and clinical innovation at UnitedHealthcare Community &
State, the country’s largest Medicaid insurer, with over five million
members in 26 states. Previously, he was Chief Operating Officer of
UnitedHealthcare Tennessee, and earlier in his career, he was a senior
executive at Healthways, the largest independent global provider of
well-being improvement solutions.

Joining Mr. Ratzlaff and Mr. Hodgdon on the board from Pharos will be
Partner Jim Phillips, Principal Anna Kovalkova, and Vice President Ryan
Shelton.

Mr. Phillips said, “We are pleased to invest alongside Ken and his
family in this rapidly growing segment of the healthcare space. Beacon
has become a leading provider of behavioral healthcare services in the
state of Michigan and we are delighted to work with Ken, Darren and
other members of the Beacon team to make those vital services available
to an even larger population.”

Mr. Ratzlaff added, “I am delighted to be partnering with Pharos. Their
capital resources and experience in the field of behavioral health,
along with Darren’s strong executive experience, will be instrumental as
we grow our company and expand the care we offer to Michigan’s
communities.”

Mr. Hodgdon noted, “Joining Beacon is a natural extension of my previous
work developing and implementing programs to improve access and the
quality of healthcare services for individuals with complex needs. The
availability of housing for these populations as well as qualified and
compassionate people to support them are scarce resources and a
challenge to find. Beacon provides both and an opportunity for us to
scale and fill a critical gap in the current healthcare system.”

Avondale Partners served as exclusive financial advisor to Beacon.

About Beacon

Founded in 1998, Beacon Specialized Living Services (www.beaconserv.org)
offers behavioral healthcare through specialized residential adult
foster care (AFC) facilities and community living service apartments in
30 locations across western and northern Michigan. The company serves
developmentally disabled, mentally ill, and autistic adults, as well as
those challenged with substance abuse, addiction, dementia, and
Alzheimer’s, in a behavioral healthcare setting.

About Pharos Capital Group

Based in Dallas and Nashville, Pharos Capital Group is a private
investment firm. Since inception, Pharos has invested in 47 companies
and has managed over $800 million of assets. Pharos typically invests
$25-$50 million in rapidly growing middle market companies seeking later
stage funding for internal growth, acquisitions, leveraged buyouts,
management buyouts, or recapitalizations across industry sectors, with
particular focus on healthcare and business services. For more
information about Pharos, please visit www.pharosfunds.com.

Contacts

Owen Blicksilver Public Relations, Inc.
Caroline Luz, 203-656-2829
caroline@blicksilverpr.com