Blue Wolf, Macquarie approach deal for RHA Health

  • Sell-side adviser: Moelis
  • Follows transactions involving industry giants: Civitas, BrightSpring  
  • Blue Wolf and Peloton Equity announce formation of ClearSky Health, inpatient rehab platform

Blue Wolf Capital Partners and Macquarie Principal Finance are nearing a deal for RHA Health Services, according to people familiar with the matter.

The pair signed a letter of intent to acquire RHA, the Asheville, North Carolina, provider of support services to those with intellectual and developmental disabilities, the people said.

The transaction would conclude a Moelis-run auction that kicked off in the fall.

Buyouts initially reported in October that RHA, backed by Formation Capital and Safanad, was in early discussions with potential financial buyers.

Sources had placed RHA’s Ebitda at about $30 million to $35 million.

Consistent with recent sector activity, the pending transaction is valued at a single-digit multiple of Ebitda, one source said.

Larger peers Civitas Solutions and BrightSpring Health Services, formerly ResCare, traded hands in December.

Onex Partners agreed to sell BrightSpring to KKR-backed pharmacy-services provider PharMerica in a deal valued at a 9x to 9.5x multiple of Ebitda, or at a valuation in the $1.3 billion to $1.43 billion range, a source told Buyouts at the time.

Around the same time, Centerbridge Partners agreed to buy Civitas in a $1.4 billion take-private, providing an exit for Vestar Capital Partners. The deal equated to a multiple of about 7.6x pro forma adjusted Ebitda, according to another source.

RHA, which serves more than 1,800 individuals a year across Georgia, Florida, North Carolina and Tennessee, offers community- and residential-based services.

Services include supported living, waiver programs and employment services tailored to individuals living with disabilities. The company also offers mental health and substance treatment services.

For Blue Wolf, the anticipated transaction comes as it formed ClearSky Health, a new platform focused on inpatient rehabilitation facilities and related post-acute-services companies.

The firm launched the company alongside Greenwich, Connecticut, growth-equity firm Peloton Equity, an April 29 news release said.

Blue Wolf, a New York firm focused in the middle market, often invests in special situations, or in sectors facing complexities such as government exposure or organized labor exposure.

Macquarie Principal Finance provides flexible financing and investment capital, with a typical investment of $20 million to $200 million.

Representatives of Blue Wolf, Formation Capital and Moelis declined comment, while those with Macquarie, RHA and Safanad didn’t immediately return requests for comment.

Action Item: Check out Blue Wolf’s latest Form ADV: