First-round bids for Clearview Capital’s St. Croix Hospice are due this week, according to two sources familiar with the matter.
Healthcare-focused investment bank Cain Brothers is lead financial adviser on the sales process for the Midwest-concentrated provider of hospice-care services, while healthcare boutique advisory firm Triple Tree is co-advising, Buyouts has learned.
The process for the Oakdale, Minnesota, company is broad, encompassing strategics and sponsors, one source said. Hospice assets the likes of St. Croix have typically commanded a multiple of EBITDA in the low-double-digits, the source added.
The Wall Street Journal initially reported last week that PE-backed St. Croix had retained Cain Brothers to explore a sale.
Private equity has often been left out of hospice-care auctions, largely because of an aggressive strategic buyer group consolidating the industry, one source noted. But with so much consolidation having already occurred, the strategics have become picky, while at the same time hospice has grown more appealing to the PE community, this person said.
By and large, remaining pure-play hospice operators of scale are viewed as having real scarcity value and continued runway for consolidation.
Founded in 2008, St. Croix offers end-of-life palliative care for patients suffering from life-limiting or terminal illnesses. Its hospice services are offered across Minnesota, Wisconsin, Iowa, Nebraska and Kansas. St. Croix accepts Medicare, Medicaid and most private insurance plans, its website says.
The CEO, Heath Bartness, has led the company since its 2008 inception. Management intends to stay on post-transaction, one source said.
For Clearview, the process comes nearly four years after it acquired St. Croix out of its $325 million Fund III. Terms of the October 2013 transaction weren’t disclosed. St. Croix in 2015 subsequently scooped up St. Jude Healthcare, adding a presence in Kansas and Nebraska while gaining scale in its existing Wisconsin and Iowa markets.
Silicon Valley Bank provided senior debt on the 2013 transaction, while Northstar Mezzanine Partners provided mezzanine financing.
Clearview typically takes majority ownership in companies generating EBITDA in the $3 million to $15 million range, investing between $8 million and $50 million of equity.
Calvin Neider, William Case Jr. and Matthew Blevins of Clearview serve as board members at St. Croix.
Cain Brothers has represented a number of hospice-care and home-health companies. Among the most recent was the auction run for New Century Hospice, which ultimately produced a sale to Thomas H Lee Partners platform Curo Health Services in 2016.
In home health, Buyouts reported June 13 that Premier Home Health Care Services was exploring a sale through a JP Morgan Securities-run sales process.
Action Item: Reach Clearview partner and St. Croix director William Case at firstname.lastname@example.org or +1 203-698-2777.
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