CNS, brain-injury-rehab company, approaches sale

Centre for Neuro Skills, one of the nation’s largest pure-play providers of rehab for traumatic brain injury, is in the midst of a sales process, according to two sources.

Los Angeles middle-market advisory firm Intrepid is conducting the auction for closely held CNS, the sources said.

First-round bids for the Bakersfield, California, company came in north of 10 times the target’s $20 million-plus of EBITDA, one source said, implying a deal will ultimately be valued beyond $200 million.

CNS has been on the market for a while now, as the process kicked off around November, the other source said.

CNS offers a wide range of brain-injury-rehab services through its individualized treatment programs. Services include community-based residential rehab, neurobehavioral rehab, stroke rehab, physical therapy, speech-and-language therapy and educational therapy, counseling, community reentry assistance and family-oriented education classes, among others.

Founded in 1980 by President and CEO Mark J. Ashley, CNS has locations across California in Bakersfield, Los Angeles and San Francisco, as well as in Dallas.

CNS competes with companies offering comparable services, like home-care giant ResCare, which Canadian sponsor Onex Partners took private in 2010 in a deal valued at about $384 million. Mentor Network, a unit of publicly traded Civitas, also provides services that treat brain and spinal-cord injuries.

Reuters in August 2014 reported that Onex was working with Goldman Sachs and Jefferies to explore a sale of ResCare, Louisville, Kentucky. A potential process was expected to produce a deal valued more than $1 billion, the report said, but the company has yet to trade hands.

Vestar Capital, which bought Boston’s Civitas in 2006, took the health-services company public in September 2014 but continues to own a majority of the shares outstanding. Civitas’s current market cap sits at about $685 million.

Other PE-backed providers of neuro rehab include Mentis Neuro Rehabilitation, the Houston provider that Denver’s Excellere Partners scooped up in January 2015. Terms weren’t disclosed.

Representatives of CNS and Intrepid did not immediately return requests for comment.

Action Item: Centre for Neuro Skills website: http://www.neuroskills.com/

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