Nearly five years into its investment, Comvest Partners is seeking a buyer for D&S Community Services, according to four people with knowledge of the process.
Moelis is retained as sell-side financial advisor on the sale process.
The process is past its first round with interim bids fast approaching.
There is a strong degree of pure play sponsors seeking a platform investment competing in the process, according to two of the people. That said, sources pointed to large PE-backed platforms such as Civitas, backed by Centerbridge Partners and Vistria Group, and KKR’s BrightSpring Health Services as logical buyers.
The company is marketing approximately $25 million in EBITDA with the process likely to produce a high-single to low-double-digit (9x-11x) EBITDA multiple, the people said. That would suggest a deal valued around $250 million.
Comvest, headquartered in West Palm Beach, Florida, completed its acquisition of D&S in January 2016. The firm invested out of Comvest Investment Partners V, an $893 million pool of capital that closed in October 2015.
Headquartered in Austin, Texas, D&S is a provider of residential services and supports for individuals with intellectual and developmental disabilities in Texas, Tennessee and Kentucky. Its residential and community-based services include supported group home living, intermediate care facilities, foster care, in-home support, day habilitation programs, and specialty therapy and nursing services.
The transaction follows activity involving its D&S peers including RHA Health Services, which Blue Wolf Capital bought in August 2019 in a deal valued at approximately $300 million, people familiar with the matter told PE Hub at that time.
Onex Partners in December 2018 agreed to sell BrightSpring (formerly ResCare) to KKR-backed pharmacy services provider PharMerica in a deal valued at a 9x to 9.5x multiple of EBITDA, or at a valuation in the $1.3 billion to $1.43 billion range, a source told PE Hub then.
Around the same time, Centerbridge agreed to buy Civitas in a $1.4 billion take-private, providing an exit for Vestar Capital Partners. The deal equated to a multiple of about 7.6x pro forma adjusted EBITDA, a source previously told PE Hub.
Other private equity-backed players in the IDD space include WindRose Health Investors’ Caregiver. GI Partners sold AdvoServ to Wellspring Capital in 2015, but it is unclear if the business – now reportedly called Bellwhether Behavioral Health – is still a portfolio company of the latter.
Comvest did not return PE Hub‘s requests for comment and the company could not immediately be reached. Moelis declined to comment.