Apax Partners agreed to buy a stake in InnovAge from Welsh, Carson, Anderson & Stowe in a deal valuing the provider of PACE (Program of All-inclusive Care for the Elderly) at $950 million, according to four sources familiar with the matter.
In connection with the agreement, Apax and WCAS are set to jointly control InnovAge, with each owning 49 percent stakes, one of the people said. The deal has yet to close.
The transaction concludes a sale process that kicked off several months ago, with most diligence completed before covid-19 triggered market volatility in mid-March. Centerview Partners and Guggenheim Partners provided financial advice on the process.
PE Hub wrote in early June that InnovAge was awaiting final bids, with WCAS expected to retain a close to 50 percent position should the process produce a sponsor outcome. Other parties in the mix, sources said at the time, included Centerbridge Partners and Clayton, Dubilier & Rice.
Apax’s bid topped final offers from other private equity finalists, while UnitedHealth Group’s Optum bid at a slightly higher value but for a controlling stake, some of the people said.
For Apax, the deal is its first new healthcare platform investment since 2018, when it bought Healthium MedTech, an Indian medical devices player. The firm’s latest US-based healthcare investment was Kepro, a provider of care coordination and quality assurance services, which it backed in 2017.
Headquartered in Denver, Colorado, InnovAge is the country’s largest provider of PACE – an alternative to nursing programs.
InnovAge offers PACE in Colorado, California, New Mexico, Pennsylvania and Virginia, with the goal of helping individuals live independently for as long as possible. The company coordinates and provides seniors with customized healthcare, in-home care and social services and support, as well as affordable housing in certain markets.
The company expects to produce 2020 EBITDA in the $60 million to $70 million range, sources previously said.
WCAS first invested in the company in May 2016 in a $196 million transaction, shortly after InnovAge converted its non-profit status into a for-profit entity.
Apax declined to comment. WCAS, Optum and InnovAge did not return requests for comment on Thursday.
Action Item: Check out Apax’s latest Form ADV