Sale of EQT’s Press Ganey valued at more than $4.2 bln


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  • Valuation suggests Ebitda multiple in high teens
  • Sponsor trade preferred over strategic sale
  • EQT bought company in Oct. '16, ending 15-month stint on public markets

Less than three years after scooping up Press Ganey in a $2.35 billion take-private transaction, EQT is exiting what represented the Swedish firm’s first-ever North America investment in a deal valued between $4.2 billion and $4.3 billion, four sources told Buyouts.

An investor group including Leonard Green & Partners and Ares Management have agreed to acquire the South Bend, Indiana, company, a Tuesday announcement disclosed.

Led by Executive Chairman Pat Ryan, Press Ganey is the largest independent provider of patient-satisfaction surveys for hospitals, serving more than 41,000 facilities. The company also offers analytics and advisory services that support patient safety and quality.

Financial terms of the acquisition weren’t publicly disclosed; however, consistent with previous press reports, the sales process for Press Ganey was anticipated to produce a $4 billion-plus transaction.

Press Ganey expects to produce approximately $230 million in 2019 Ebitda and $260 million in 2020 Ebitda, some of the sources said.

A $4.25 billion enterprise value – the mid-point of sources’ valuation range – suggests an 18.5x multiple of 2019 Ebitda or 16.3x multiple of 2020 Ebitda. The valuation implies a high-single-digit multiple of revenue, one of the sources added.

The transaction concludes a Barclays– and Goldman Sachs-run auction that kicked off earlier this year.

While sources in the past have pointed to a number of strategics – those in the business of data, information or survey-making – that could make logical suitors for Press Ganey, the company’s management team had a preference for a sponsor trade, a fifth source told Buyouts.

The winning consortium accelerated the process by sufficiently distinguishing themselves early on in terms of their desire to own Press Ganey and ability to move quickly, this source said.

Generally speaking, Press Ganey is considered a well-known company, with the PE community having gotten to know the asset over the years through past transactions and its 15 months as a public company.

EQT investment

EQT in October 2016 bought Press Ganey for approximately $2.35 billion, ending the company’s short time as a public company and representing one of EQT’s largest bets in history at the time.

Press Ganey, purchased through EQT VII, is also notable in that it represents both the first direct investment and exit in North America out of one of EQT’s large cap buyout funds.

Under EQT’s less than three-year-hold, Press Ganey broadened its suite of products beyond patient experience and surveys, making a push into patient safety and quality.

The evolution of its product portfolio contributed to the transformation of the company’s go-to-market approach, as Press Ganey now offers customers an enterprise solution offering various products, as opposed to a pay-per-survey model.

The company has completed five acquisitions under EQT’s ownership, including its February 2018 purchase of HealthStream’s patient experience and engagement businesses.

Vestar Capital initially took Press Ganey public in May 2015, raising approximately $235 million.

Vestar in January 2008 purchased the company from American Securities for an undisclosed price. American Securities purchased Press Ganey for more than $100 million in October 2003, according to a source close to the transaction at that time.

A Press Ganey spokeswoman said the transaction is anticipated to close in mid-July.

Representatives of EQT and Ares declined to comment, while those with Leonard Green did not return requests for comment.

Action Item: Take a look at Leonard Green’s latest Form ADV: https://bit.ly/2Khkowf