Clearlake readies potential $1.4bn-plus sale of Provation Medical

Less than four years ago, the Santa Monica PE giant carved out the healthcare software business from Wolters Kluwer for $180m in cash.

Clearlake Capital is gearing up for a sale of Provation Medical, a provider of healthcare software and SaaS solutions for clinical productivity, according to four people familiar with the firm’s plans.

William Blair and Credit Suisse have been appointed for sell-side financial advice, with a process poised to formally launch this fall. 

Provation generated approximately $70 million in EBITDA over the last 12 months, whereas forward looking EBITDA is viewed at $77 million, some of the sources said. The sellers hope to command at least 20x EBITDA in a sale, they said, placing value expectations at $1.4 billion to upwards of $1.5 billion, depending on which EBITDA is applied.

Under Clearlake, the company has grown significantly in value. The Los Angeles-based private equity firm carved out the business from Netherlands information-services giant Wolters Kluwer for $180 million in cash in March 2018. At that time, Provation was generating in the low $20 million range of EBITDA, sources said.

The company has strong cash flow and has been growing in the low double-digit zip-code, sources said. Acquisitions in the last couple years include iProcedures, endoPRO, ePREOP, and MD-Reports.

Provation, based in Minneapolis, helps physicians and other healthcare professionals improve clinical productivity, care coordination, quality reporting and billing processes. Its software and SaaS solutions – which span the entire patient encounter, from pre-procedure through post-procedure – are used by more than 5,000 hospitals, ambulatory surgery centers (ASCs), anesthesia groups and medical offices.

The company has a large concentration in gastroenterology, with its offerings used by 43 of the top 50 US hospitals for gastroenterology (GI) and GI surgery, according to its website. 

The company also has a global presence with footprints in Australia, New Zealand, Canada, and the Middle East.

Growth via M&A has been a key element of the playbook under Clearlake, and will likely remain one under its new owner, sources said. 

Clearlake has been an aggressive player in healthcare technology. Elsewhere in the portfolio, the firm is working on a single-asset secondaries process for Symplr, which provides healthcare-specific governance, risk and compliance software, affiliate publication Buyouts recently wrote.

Clearlake, William Blair and Credit Suisse declined to comment. The company could not immediately be reached for comment.