Court Square starts process for Medical Knowledge Group

Less than two years into its investment, Court Square Partners has kicked off a sale process for Medical Knowledge Group, an analytics-driven medical communications agency, multiple sources familiar with the matter told PE Hub. 

Harris Williams is engaged for financial advice on the process, with deal books recently distributed, sources said. 

Court Square invested in MKG in December 2019, buying the business from WindRose Health Investors for an enterprise value of $330 million, or 13x EBITDA, PE Hub wrote. 

MKG since that time has grown significantly, as have deal multiples for such businesses. As the “MedComms” industry continues to prove an outgrowth of the massive and rising levels of drug development, relevant assets have recently traded hands in the 17x to 21x EBITDA range.

MKG is marketing EBITDA of $50 million, the sources said. One person expects the company could trade in the $850 million to $900 million range, while another said MKG could be valued as high as $1 billion.

Founded in 2004 by CEO Leon Behar and Ed Lazarowitz, MKG educates physicians in the science and efficacy of drug therapies and rare disease states through live engagements, digital media and direct interactions with health care practitioners. It primarily focuses on specialty and rare-disease pharmaceuticals. 

The company partners with some of the world’s largest biopharmaceutical companies as well as niche biotech firms to maximize the commercial potential of their brands.

MKG has executed a number of “tactical acquisitions,” as one source put it. That includes its recent purchase of Conisus from Webster Equity Partners, through which it added an oncology-focused medical communication services platform to its umbrella of brands. Canaccord Genuity advised Conisus on the transaction. 

Although the deal was never announced, a source with knowledge of the deal terms said Conisus, with EBITDA in the $15 million to $20 million range, was valued at $195 million. 

The process for MKG comes on the heels of a flurry of relevant deal activity. As biopharma and pharma companies put huge and growing sums of capital to work to develop new therapies and successfully reach their target audience, businesses the likes of MKG are seeing growth demand. 

For sponsors, the industry is also attractive because of its fragmentation, which gives platforms an opportunity to build out and diversify beyond their core offerings, sources said. Another growth lever is the overall digital transformation of the industry, sources add, while many of these companies have also proven more efficient in the wake of rising demand through the pandemic. 

On Thursday, PE Hub wrote that TPG this summer made a strategic growth investment in BGB Group, which valued the New York City-based medical communications agency at $760 million. 

Separately, RLH Equity Partners on Thursday announced its acquisition of Imre, a digital communications agency committed to creating purpose driven ideas for blue-chip healthcare and consumer brands. JEGI Clarity advised Imre on the deal.

In other more recently concluded processes, Eversana, backed by Water Street Healthcare Partners and JLL Partners, prevailed in the process for Intouch Group, a full-service network agency for the life science industry. The anticipated deal is expected to value the life sciences-focused marketing services company at at least $950 million, or at least 19x, some of the people said.

In other activity, Ares Management recently agreed to invest in The Lockwood Group, which commanded close to 21x the medical communications company’s projected 2021 EBITDA of $17 million, sources familiar with the deal terms told PE Hub. That implies a deal valued at roughly $360 million. 

Elsewhere, life sciences-focused consulting business ClearView Healthcare Partners attracted an investment from GHO Capital, a European-based specialist in healthcare. Ares also was around that process, along with several other PE shops that participated, sources said. GHO’s deal for ClearView was valued at about 17x its marketed EBITDA of $43 million, implying a deal valued around the ballpark of $730 million, PE Hub wrote. 

Other relevant deals of scale are on the horizon, including a highly anticipated sale process for Parthenon Capital’s Trinity Life Sciences, a global strategy consulting business. Jefferies and SVB Leerink are engaged for sell-side financial advice, PE Hub wrote previously. 

Court Square declined to comment and Harris Williams did not return PE Hub‘s requests for comment. MKG executives could not immediately be reached.