- Florida PE firm invested in MD Now in April 2012 via Fund III
- Urgent-care network encompasses 40 centers in South Florida market
- Other PE investment in sector: TPG, Warburg, Abry, Revelstoke, Enhanced, among others
Brockway Moran & Partners is in the midst of a sales process for MD Now, the urgent-care network that dominates much of the South Florida market, according to five sources.
Houlihan Lokey is offering sell-side advice on the auction, some of the sources said.
The West Palm Beach, Florida, company generated trailing 12-month Ebitda of about $15 million, while mature Ebitda, which assumes maturity of clinics opened over the last few years, is approximately $20 million, sources said.
The process, which two of the sources said has narrowed to two or three parties, is anticipated to produce a deal valued at a double digit multiple of Ebitda.
Led by CEO Michael Holton, MD Now is viewed as having successfully built out regional density in recent years, outpacing peers in the market. Emblematic of that, about 24 of its 40 walk-in clinics have been open less than 36 months, one of the sources noted. Today its centers span the Palm Beach, Broward and Miami-Dade counties.
The South Florida market also is compelling in that it has a large Medicare Advantage population, while buyers may also view MD Now as an opportunity to control hospital re-admissions, sources noted.
Brockway Moran, of Boca Raton, Florida, invested in MD Now in April 2012 through Fund III, alongside the provider’s founder, Peter Lamelas. The firm’s Managing Partners Peter Brockway and Michael Moran and Partner Ari Zur are members of the company’s board of directors.
From a broader market perspective, sources described urgent-care as having become increasingly crowded over the years. While certain assets like MD Now have thrived, others have struggled in markets that have gotten over-built.
For instance, it’s tougher to focus on markets where hospitals are partnering with or buying urgent care centers. For the health systems, it’s less about whether the urgent care affiliates make money, but whether clinics serve as a front door for patient referrals, which are then funneled to more costly specialized care services, sources said.
Hospital operators HCA and Tenet both have their own affiliated urgent-care arms via CareNow and CareSpot, respectively.
Other companies like TPG-backed GoHealth build out networks through a joint-venture strategy. GoHealth’s JV partners include Northwell Health, Legacy Health and Dignity Health, among others.
In other recent urgent care activity, NewSpring Health Capital on Thursday said it has led a co-investment round in Vybe, a provider in the Greater Philadelphia region.
And in February, Warburg Pincus’ CityMD bought Stat Health from Spanos Barber Jesse & Co in a deal valued just south of $100 million, Buyouts reported. New York’s Warburg bought CityMD less than a year earlier in one of the segment’s most high-profile transactions in recent years. The deal was reportedly valued at about $600 million.
Also in February, Enhanced Healthcare Partners recapitalized NextCare. Madison Capital provided a $240 million first- and second-lien credit facility in connection with the transaction.
Other PE-backed assets include Abry Partners’ FastMed and Revelstoke Capital Partners’ FastPace Urgent Care, among various regional platforms the likes of Urgent Team, whose backers include SV Life Sciences, River Cities Capital Funds, Crestline Investors and Petra Capital Partners.
Other notable players include MedExpress, which UnitedHealth’s Optum unit bought in 2015.
Representatives of Brockway Moran and Houlihan Lokey did not immediately return requests for comment.
Action Item: Contact Peter Brockway at email@example.com