Arsenal’s deal for Hopebridge valued at ~$255 mln

  • Baird Capital investment dates to November ’17
  • Indianapolis company operates 38 autism-therapy centers
  • Gryphon entered autism-treatment space in March via LEARN

Arsenal Capital Partners’ all-cash purchase of a majority stake in Hopebridge assigns the Indianapolis autism treatment-services company an enterprise value of some $255 million, Buyouts has learned.

Representing the latest in a flurry of deals in behavioral health, New York’s Arsenal said May 6 that it acquired Hopebridge. Terms weren’t disclosed.

The deal comes less than 18 months after Baird Capital invested in the fast-growing company. Baird Capital, Robert W. Baird & Co’s PE arm, is reinvesting in connection with the transaction.

The deal concludes a Harris Williams-run sales process. The Cain Brothers division of KeyBanc Capital Markets advised Arsenal.

The transaction equates to a 15.5x multiple of Hopebridge’s just north of $16 million in Ebitda, based on projected pro forma run-rate Ebitda through June 30, a source said.

The multiple is closer to 12x based on a further adjusted Ebitda figure in the low $20 million range, when applying mature Ebitda contributions for Hopebridge clinics, another source said.

Founded in 2005 and led by CEO Dennis May, Hopebridge provides applied behavioral analysis and occupational, speech and feeding therapies for children with autism-spectrum disorder among other conditions.

The provider of entirely clinic-based services has 38 locations across Georgia, Indiana, Kentucky and Ohio.

In connection with the transaction, Arsenal Operating Partner BG Porter has been named Hopebridge’s chairman. Baird Partner Mike Bernstein and Operating Partner Rich Neff will join the board.

Arsenal is investing out of Fund V, which closed at $2.36 billion in April. The middle-market firm invests in specialty industrials and healthcare.

Its healthcare portfolio consists of Accumen, BioIVT, Certara, TractManager and Wirb Copernicus Group.

Arsenal’s entrance into the behavioral health market follows Gryphon Investorsmajority stake acquisition of LEARN Behavioral in March.

In other notable activity, Blackstone in April 2018 bought Center for Autism and Related Disorders in a deal valued at $600 million.

FFL Partners a few months earlier acquired Autism Learning Partners from shareholders including Jefferson River Capital, Tony James’s family office, in a deal valued north of $270 million.

Elsewhere, KKR in January 2018 invested in Blue Sprig Pediatric through its $1.45 billion strategic growth fund.

Representatives of Arsenal, Baird and Harris Williams declined comment.

Action Item: Check out Arsenal’s latest Form ADV filing: