Blackstone walks away with the win for autism-treatment company CARD

  • CARD generated 2017 adj Ebitda ~$23 mln
  • Advisers: Berkery Noyes sell-side; Cain Brothers buy-side
  • Tony James FO sold ALP to FFL for >$270 mln in December

A few months after the family office of Blackstone Group’s executive vice chairman, Tony James, got out of the autism business, the executive is getting back in through the funds his private equity shop manages.

Blackstone is buying founder-owned Center for Autism and Related Disorders, concluding what was said to be a tightly run auction process for the industry giant.

Terms weren’t disclosed in the late Friday announcement, but the transaction was valued at around $600 million, representing the largest sponsor deal in the autism-treatment-services sector to date, Buyouts has learned.

CARD management, including Founder and CEO Doreen Granpeesheh, who will continue to lead the company, will invest alongside Blackstone in the transaction, the firm said.

The Woodland Hills, California, company produced 2017 pro forma adjusted Ebitda of about $23 million, while 2018 projected pro forma adjusted Ebitda is about $33 million, according to one source. Revenue is about $130 million and $175 million, respectively, over the corresponding periods, according to the source.

CARD turned to Berkery Noyes & Co for financial advice, while Cain Brothers, part of KeyBanc Capital Markets, advised Blackstone.

The deal comes after Jefferson River Capital, James’s family office, unloaded the second-largest player in the sector after CARD, Autism Learning Partners, via a sale to FFL Partners.

ALP, whose other selling shareholders were Scopia Capital Management and Great Point Partners, commanded a valuation north of $270 million, Buyouts reported.

Providing even further validation to the sector: Around the same time CARD launched its auction in January, KKR announced an investment in Blue Sprig Pediatric through its $1.45 billion strategic growth fund.

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

CARD, which today encompasses about 181 locations across 32 states, provides services that are about 70 percent center-based. The company has a diversified customer mix and is reimbursed for services largely via the commercial insurance market.

Heightened interest in the sector over the past several months has been driven by various factors, including increasing awareness of the problem, growing demand for services and an evolving reimbursement market that requires more sophisticated models of care.

Other sponsors that have invested in the space include LLR Partners, Shore Capital, Wicks Group, Jordan Co, Baird Capital, Petra Capital and WindRose Health Investors (formerly MTS Health Investors), Rothschild Merchant Banking affiliate Five Arrows Capital Partners and Pharos Capital Group.

Representatives of CARD, Blackstone and Berkery Noyes declined comment.

Action Item: Read more about why investors are eager to invest in autism: https://pehub.com/buyouts/healthcare-investors-flocking-opportunities-autism/

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