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Blackstone looks to sell Apria: sources

The Blackstone Group has held recent talks to sell Apria Healthcare Group, three sources said.

One PE executive said Blackstone’s “quiet discussions” for Apria were just short of a sales process. Goldman would likely be hired for the auction, the PE source said. However, two bankers said Goldman Sachs had already been hired to advise on the process.

Talks to sell Apria took place as recently as a month ago, one of the bankers said. It’s unclear how much Apria would fetch.

Lake Forest, Calif.-based Apria provides home respiratory services and medical equipment like seat cushions, lift chairs and portable nebulizers. Apria produced about $2.4 billion in revenue in 2012, Moody’s Investors Service said in a November report. This has likely changed since Apria closed the sale in January of its specialty infusion services business unit to CVS Caremark for about $2.1 billion. Apria’s infusion business accounted for 50 percent of company revenue, Moody’s said. Apria in November said that third quarter adjusted EBITDA dropped 18.8 percent to $60.4 million for the time period ended Sept. 30.

Blackstone’s investment in Apria dates back to 2008 when the buyout firm acquired the home healthcare services firm for $1.6 billion. Blackstone invested $700 million equity to buy Apria, according to a July 2008 SEC filing.

The investment came from Blackstone’s fifth flagship fund, which closed at $21.7 billion in 2007. Blackstone’s sixth buyout fund, which raised more than $16 billion in 2012, is about two-thirds invested, peHUB has reported. The firm expects to begin marketing for its seventh global buyout fund by the end of this year.

Blackstone Capital Partners V LP is producing a 6.9 percent net IRR and 1.4x investment multiple as of March 31, according to performance data from the California Public Employees’ Retirement System. Fund VI is generating a net IRR of 17.5 percent and a 1.2x investment multiple as of March 31, CalPERS said.

Blackstone and Goldman declined comment. Apria did not return calls for comment.

Photo courtesy of Apria