Behind Centerbridge and CDPQ’s $2.2bn deal for MedSol; Ontario Teachers’ validates growth of autism-treatment; Apax buys CI Capital’s SavATree

Centerbridge and CDPQ snag MedSol while Ontario Teachers' values Acorn at $250 million.

Morning!

Whether it’s the lower-middle-market or we’re talking billions of dollars, healthcare activity is showing no indication of slowing. Today’s rundown includes metrics and details involving two done deals in healthcare, and elsewhere, a sponsor-to-sponsor transaction involving a provider of professional tree, shrub, and lawn care services.

Big one: As demand for clinical workforce continues to outstrip supply at health systems nationwide, Centerbridge Partners and CDPQ teamed up to buy healthcare staffing firm Medical Solutions for an enterprise value of approximately $2.2 billion, according to people familiar with the deal terms.

Like many other healthcare processes over the last several months, the pandemic added complexity in valuing MedSol, which places travel nurses, allied healthcare professionals, interim clinical leaders and non-clinical professionals, in contingent as well as permanent positions.

MedSol marketed $240 million of 2021 EBITDA in the sale process, and sources said the Omaha, Nebraska-headquartered business is likely to exceed that number. That said, the buyer underwrote a more normalized EBITDA of around $200 million, the people said, accounting for the high rates and high volumes the nursing industry is witnessing today. Financing was also done using this lower figure, they added.

MedSol came to market earlier this year as the broader sector, buoyed by the covid pandemic, experienced a boost. When hospital utilization is booming that lends to growing demand for temporary nurse staffing, while also leading to inflation in day rates for nurses. Nonetheless, the supply-demand imbalance in nursing isn’t a new phenomenon, but one that has long preceded covid.

Read my full report on PE Hub.

Sector resurgence: The recent sale of MBF Healthcare Partners’ Acorn Health is proving another validator that the sub-sector remains an interesting pocket of healthcare investment for growth-focused financial buyers.

Ontario Teachers’ Pension Plan Board, in its latest multi-site healthcare bet, acquired a majority stake in Acorn valued at approximately $250 million, four sources familiar with the deal terms told PE Hub. The deal, announced Friday, implies a 15.5x multiple of pro forma maturity-adjusted EBITDA for 2021, or rather, a 26x multiple of year-end TTM EBITDA, sources said.

Considering those metrics, the transaction appears precedent-setting, they added. Its valuation speaks to both the company’s quality and growth opportunities sitting in front of the broader autism segment – fueled by the need for greater professionalization and standardization of care in what remains a fragmented and underserved industry, they said.

The Acorn investment comes on the heels of Abry Partners’ July sale of Lighthouse Autism to Cerberus Capital Management, which commanded a valuation just north of $400 million, PE Hub reported. The back-to-back transactions are the first platforms in autism-treatment to transact since early 2020.

Read my full report on PE Hub.

Save a tree: Here’s an interesting deal in a niche but seemingly large market. Apax Funds has agreed to acquire SavATree, a professional tree, shrub and lawn care provider, from CI Capital Partners, the firms said Tuesday morning.

For CI Capital, SavATree looks to be a winning investment. The company under its investment — which dates to June 2017 — has tripled its revenue. It has scaled from 28 branches in 12 states to 58 branches serving 27 states, fueled by a combination of organic growth and 27 add-on acquisitions.

Apax said separately it plans to accelerate its already strong growth trajectory, applying its knowledge and experience gained via previous relevant transactions.

“This is a market the Apax Funds know well, and SavATree was prioritized given the Funds’ sub-sector specialization in route-based services and residential services with prior investments in Authority Brands, Garda, Safety Kleen, and ADCO,” commented Ashish Karandikar a partner at Apax, referring to SavATree as a “true leader in the arboriculture space.”

Read more on PE Hub.

That’s it! Have a great rest week ahead, and as always, write to me at springle@buyoutsinsider.com with any tips, feedback or just to say hello!