Gryphon strikes deal for LLR’s LEARN Behavioral

  • LLR invested in LEARN in May ’16
  • Sell-side adviser: Harris Williams; Buy-side: Berkery Noyes
  • Adds to Gryphon’s healthcare portfolio

Gryphon Investors agreed to acquire LLR PartnersLEARN Behavioral, according to people familiar with the matter.

The transaction concludes a Harris Williams-run sales process for the provider of autism-treatment and educational services, as initially reported by Buyouts in November. Berkery Noyes advised Gryphon on the transaction, a person with knowledge of the situation said.

Financial terms of the deal are unknown. The company was initially marketed off of about $24 million of pro-forma adjusted Ebitda, sources previously said.

For Gryphon, the acquisition follows various bets in physician specialties including, most recently, its June investment in Water’s Edge Dermatology, a network of Florida dermatology clinics.

In July 2017, the San Francisco firm won the sponsor-driven auction for Ares Management’s OB Hospitalist Group, an obstetrics provider, in a deal valued at around $625 million, sources said at the time.

A year earlier Gryphon invested in Smile Brands, one of the nation’s largest providers of support services to dental providers.

LEARN was founded in 2007 by CEO Michael Maloney, who previously helped establish Catapult Learning’s No Child Left Behind program in more than 50 school districts nationwide.

Today the company’s services include treatment to children with autism and other special needs, including speech-language therapy, occupational therapy and individual and family counseling. A majority of its applied behavioral analysis, or ABA, therapy is provided in home settings, with a smaller portion of services offered in centers and schools.

Still, with roots that came out of the education system, a large chunk of the business is composed of education services such as tutoring and academic intervention programs, sources previously said.

It’s unclear how sizable or profitable that piece of the business is.

LLR, a Philadelphia private equity firm focused on the lower-middle market, purchased LEARN in May 2016 from Milestone Partners.

The transaction follows an acceleration of private equity investment in the autism segment over the past few years, as demand for treatment services grows and an evolving reimbursement market requires greater institutionalization.

In notable activity, Blackstone Group in April 2018 bought Center for Autism and Related Disorders in a deal valued at around $600 million.

FFL Partners a few months earlier acquired Autism Learning Partners from shareholders including Jefferson River Capital, Tony James’s family office, in a deal valued north of $270 million.

Elsewhere, KKR in January 2018 invested in Blue Sprig Pediatric through its $1.45 billion strategic growth fund.

Gryphon declined comment, while LLR and Harris Williams didn’t return requests for comment.

Action Item: Get in touch with LLR at +1 215-717-2900

Update: This story was updated with additional information on financial advisers.