Executive Health Sale Now Focused on Strategics

Just a short update on Abry Partners’ auction for portfolio company Executive Health Resources:

peHUB has learned that the sale of Executive Health has narrowed to strategics, with the financial sponsors having dropped out. One of the remaining bidders is Ingenix, which is owned by United Health Group. Ingenix, a health information technology and services company, recently agreed to buy Picis, which provides health information services for high acuity areas of hospitals like the ER, OR and intensive care units.

Bids for Executive Health are at roughly $1.5 billion. UBS is advising on the auction.

The medical outsourcer, which is based in Newtown Square, Pa., has EBITDA of between $100 million and $125 million. Executive Health is expected to go for a high multiple, sources say. One financial sponsor bid on the company early in the process with a proposal valuing Executive Health at 8x EBITDA. “They were told ‘See you later,’” a banking source said.

ABRY Partners, which owns Executive Health, put the medical outsourcer up for sale in late Spring. It initially targeted large buyout shops like the Blackstone Group, TPG and Warburg Pincus. The decision to focus on strategics is believed to be due to the debt markets. Any deal with a strategic would be completed more quickly than with a PE firm.

“The credit markets are weaker than they were a couple months ago,” another banker says.

Officials for Ingenix and Executive Health could not be reached for comment.