Consonance Capital’s sale of Enclara said to fetch $700 mln-plus valuation

Consonance Capital Partners has unloaded its investment in Enclara Healthcare through a transaction valued upward of $700 million, sources familiar with the deal estimated.

The buyer is healthcare insurer Humana, which, through its purchase of Philadelphia’s Enclara, will extend its pharmacy solutions business to include needs associated with hospice care.

Financial terms weren’t disclosed in separate Monday, Dec. 17, announcements; however Consonance, a healthcare-focused private equity firm, noted that certain assets are excluded from the transaction. The acquisition is expected to close during the first half of 2020.

Enclara’s Ebitda lies in the $50 million to $60 million range, two people familiar with the company told PE Hub. Price expectations were around 14x Ebitda, one of the people said, which would suggest a valuation in the zip code of $700 to $840 million.

While Enclara in recent years has received a significant level of unsolicited inbound interest from both strategics and PE firms with a strategic angle, the pending transaction concludes what a third source characterized as an extremely narrow and quick process. Less than five parties were in the mix, the person said.

Humana was advised by Centerview Partners, while Enclara turned to Evercore for financial advice on the sale.

Led by CEO and Founder Andrew Horowitz, Enclara facilitates the delivery of drugs to patients in their homes during end-of-life care, or hospice care. The technology-driven hospice pharmacy and benefit management provider supports national and local hospice providers, palliative care nurses, patients and their caregivers.

Consonance, whose investment in Enclara dates to 2014, has transformed the company during its ownership through M&A and organic efforts.

Acquisitions included ExcelleRx, PGM Holdings and Avanti Health Care Services, while it also made significant investments into E3, a proprietary medication ordering and management technology platform, as well as entered the chronic care pharmacy space, Consonance said.

Consonance is led by Co-Founders Mitchell Blutt, Benjamin Edmands, Stephen McKenna and Nancy-Ann DeParl, all of whom spun out of JPMorgan Partners and its successor and predecessor entities, launching the New York firm in 2005.

Blutt, managing partner and CEO of Consonance, founded the healthcare practice group within JPMP in the 1980s.

Consonance targets growth equity, leveraged buyouts and recapitalization transactions in lower middle market U.S. healthcare companies.

The firm typically looks to invest in privately-owned or family-run businesses, as well as carve-out opportunities derived from non-core assets that large corporations are looking to divest.

Consonance, currently investing out of a $500 million fund, targets companies generating between $20 million and $150 million in revenues.

The firm in August made an investment to support the merger of Warburg Pincus-backed CityMD and Summit Medical Group. In February, it recapitalized Orsini Pharmaceutical Services.

Consonance and Humana declined to comment. Enclara did not return a request for comment.

Action Item: Email Consonance CEO Mitchell Blutt at mblutt@consonancecapital.com