Frazier Healthcare’s hospice company Abode nears sale to Tailwind

  • Company projects ~$18 mln 2018 Ebitda
  • Frazier invested in Abode in ’12
  • Webster, Vistria among sponsors to enter hospice care

Adding to the streak of home-health and hospice-care activity, Frazier Healthcare Partners is approaching the sale of its platform in the sector, Abode Healthcare.

The buyer is Tailwind Capital Partners, which prevailed in a Houlihan Lokey-run auction, a person with knowledge of the matter said, confirming a pre-merger filing on the FTC website.

Abode, with locations in 10 states, offers both hospice and home-care services but is largely focused on the former, this source and others said.

The healthcare provider accepts forms of reimbursement including Medicare, Medicaid and private insurance.

Abode, Durango, Colorado, is projecting about $18 million of 2018 Ebitda and is poised to command a multiple of Ebitda into the double digits, one of the sources said.

Tailwind, according to the HSR filing, is making the purchase through its third fund, which collected almost $1.05 billion in August 2017.

The New York sponsor typically makes equity investments in the $25 million to $100 million range in companies with enterprise values as high as $300 million.

Tailwind also owns National HME, the largest provider of outsourced medical equipment management to the hospice market. Tailwind invested in the Irving, Texas, company in July 2015.

Tailwind’s other healthcare-related investments include healthcare-IT-consulting firm Cumberland Consulting Group; wound-care and skin-product distributor DermaRite; specialty generic pharmaceutical company Edenbridge and dental-services organization Lone Peak.

Frazier’s investment in Abode dates to 2012. The deal was done through its first dedicated growth buyout fund, which in March 2016 closed at its hard cap of $525 million. Alan Frazier, Nathan Every and Kent Berkley of Frazier are on the associated deal team.

Frazier earlier this month raised its second pool of capital focused exclusively on growth buyouts. The fund, Frazier Healthcare Growth Buyout Fund IX LP, collected $780 million, surpassing its $700 million target.

The anticipated deal for Abode follows a continuation of robust activity in all facets of the home-care industry, whether that’s medical home health services, non-medical or unskilled home care, or hospice-care service.

In hospice, recent sponsors to take a piece of the market include Webster Capital, which in November won an Edge Healthcare Partners-run auction for Bristol Hospice in a $70 million-plus deal, Buyouts previously reported.

That followed Vistria Group’s secondary buyout of St. Croix Hospice from Clearview Capital in October, which resulted from a Cain Brothers– and Triple Tree-run auction.

In other areas of home care, the Houlihan Lokey-conducted process for Palladium Equity‘s Jordan Health recently concluded when Blue Wolf Capital Partners and Kelso & Co teamed up to buy the asset in an about $700 million deal, Buyouts reported.

Representatives of Tailwind and Houlihan Lokey didn’t immediately return requests for comment, while those with Frazier declined to comment.

Action Item: Get in touch with Tailwind Managing Partner Lawrence Sorrel at lsorrel@tailwind.com

Photo courtesy of LPETTET/E+/Getty Images