BayMark, Webster-backed opioid-treatment company, preps for sales process

  • Webster formed BayMark via ’15 merger of BAART Programs and MedMark
  • Formal process expect to launch in second half of 2019
  • Lewisville, Texas, company encompasses 209 opioid-treatment programs across 32 states and Ontario, Canada

BayMark Health Services, the nation’s largest network of clinics treating individuals suffering from opioid addiction, is gearing up for a sales process, Buyouts has learned.

Webster Capital has enlisted Goldman Sachs to advise on a process for Lewisville, Texas-based BayMark, people familiar with the matter said.

A formal auction is poised to launch in the second half, one of the people said, indicating that the most likely outcome is a sale to a large private equity firm.

BayMark, led by CEO Dave White and Chairman Jerry Rhodes, generated about $60 million in 2018 Ebitda, this person said.

Webster, Waltham, Massachusetts, purchased BAART Programs in June 2015 and MedMark Services in October 2015, combining the two to create BayMark.

BayMark in the time since has become one of the most active buyers of outpatient opioid-treatment centers.

In notable activity, Baymark in March 2018 bought Canadian Addiction Treatment Centers, inheriting 70-plus clinics throughout Ontario and surpassing publicly traded Acadia Healthcare as North America’s largest opioid-treatment company.

More recently, Baymark in November added SpecialCare Hospital Management of St. Louis, which offers specialized inpatient stabilization and withdrawal management services to patients through 46 acute-care hospitals in 13 states.

Following the SpecialCare acquisition, BayMark said it would manage or operate more than 200 programs, including opioid-treatment programs, office-based buprenorphine treatment programs, outpatient withdrawal management facilities, inpatient withdrawal management programs and a residential treatment facility.

BayMark offers medication-assisted treatment, using methadone and buprenorphine along with counseling and support services. Its has a presence in 32 states and in Ontario.

The anticipated process for BayMark follows months of rumors around competitor Acadia, including media reports suggesting that firms including KKR and TPG  expressed interest in the debt-ridden behavioral-health company.

Acadia in December announced the removal of Chairman and CEO Joey Jacobs. Debra Osteen, former president of Universal Health Services’ behavioral-health division, stepped in as CEO, while Acadia director and Waud Capital Partners Founder Reeve Waud was elected chairman.

In other sector activity, Frontenac Group recently agreed to sell Behavioral Health Group to Vistria Group. The deal for the Dallas opioid-treatment company was valued at $250 million-plus, a source told Buyouts in December.

Other PE-backed opioid-treatment groups include Linden Capital PartnersPinnacle Treatment Centers, Revelstoke Capital PartnersCrossroads and Housatonic PartnersAegis Treatment Centers.

Webster, for its part, has made more than one bet in behavioral health.

The firm is an investor in Discovery Practice Management, an eating-disorder-treatment platform that does business as Center for Discovery. Webster in 2018 recapitalized the company, while also diversifying through the merger with Southern California drug and alcohol addiction-treatment provider Cliffside Malibu.

Webster in 2018 also invested in autism-treatment provider Behavior Development Group.

Webster Capital declined to comment. Representatives of BayMark and Goldman Sachs didn’t immediately return requests for comment.

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