Autism-treatment giant CARD hires adviser for sale

  • Berkery Noyes hired as sell-side adviser
  • Auction to kick off after JPM Healthcare Conference
  • FFL in December bought Autism Learning Partners in $270 mln-plus deal

Center for Autism and Related Disorders, the nation’s largest provider of autism-treatment-services, is headed to the auction block, Buyouts has learned.

The Woodland Hills, California, company has retained Berkery Noyes & Co to advise on a sales process, sources familiar with the situation said.

Pre-process meetings are taking place this week at the J.P. Morgan Healthcare Conference in San Francisco, the industry’s largest conference of the year, sources said. A formal sales process will be aimed primarily at private equity and is poised to kick off shortly thereafter, they said.

CARD, founded in 1990 by Doreen Granpeesheh, provides applied behavioral analysis treatment and assessment to children and adults with autism spectrum disorder and other disabilities.

With offerings that are about 70 percent center-based, the provider has grown primarily through organic efforts, one source noted. CARD today encompasses about 181 locations across 32 states, the company’s website states.

The anticipated auction follows speculation in 2016 that CARD was in talks to do a deal with Summit Partners, but a transaction never occurred. Still, talks of a potential partnership were said to have helped fuel excitement in autism-treatment, and sponsors in the months since have flocked to the sector.

Most investment into the fast-growing vertical has been relatively small-scale, largely because autism-treatment remains a highly fragmented area with few assets of scale.

The exception is FFL Partners, which a couple weeks ago emerged as the victorious bidder for the second-largest autism-treatment provider after CARD, Autism Learning Partners. ALP’s services are almost entirely home-based.

The ALP transaction was valued between $270 million and $280 million, representing a mid-to-upper teens multiple of ALP’s 2017 adjusted EBITDA, Buyouts previously reported. ALP’s selling shareholders, Jefferson River Capital, the family office of Blackstone President and COO Tony James, Scopia Capital Management and Great Point Partners, also turned to Berkery Noyes for financial advice on the auction.

In other recent dealmaking, Shore Capital Partners made about 7x its money by selling a majority stake in Stepping Stones Group, Buyouts reported last week. Rothschild Merchant Banking’s new PE affiliate, Five Arrows Capital Partners, was the buyer.

The Cain Brothers-run auction ultimately produced an about 14x to 15x multiple of Stepping Stones’ expected $9 million in anticipated Ebitda for the 12 months ended June 30, 2018, a source previously said. Stepping Stones’ model differs from CARD, in that it places clinicians that offer autism-treatment-services in schools.

Other PE shops that have invested in autism treatment include MTS Health Investors, Wicks Group of Cos, Jordan Co, LLR Partners, Baird Capital and H.I.G. Capital.

CARD and Berkery Noyes declined comment.

Action Item: Learn more about ALP’s evolution through its recent sale to FFL: pehub.com/buyouts/ffl-takes-home-autism-learning-partners-in-270-mln-plus-deal/

Update: This article has been updated to reflect a no comment from CARD and Berkery Noyes.

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