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Home care consulting agency McBee expected to field PE interest

McBee Associates, the privately held consulting firm serving home-health providers and hospital systems, is on the auction block, according to two sources.

Investment-advisory boutique TripleTree has the mandate to sell McBee, the sources said, agreeing that the most likely outcome of the process is a sale to private equity. 

McBee ought to attract PE interest because it offers solutions into the post-acute space, which continues to be a very attractive sector itself. Strategic interest from a technology company is less certain, as the target is more services-oriented, one source said. 

The company is said to have generated 2016 revenue and EBITDA of about $41 million and $7 million, respectively, one of the sources said. McBee is projecting about 15 percent growth in 2017, the source added, suggesting EBITDA will reach $8 million to $8.5 million in 2017.

The Wayne, Pennsylvania, company is likely to command about 10x to 12x EBITDA, this person said, suggesting a deal could be valued as high as about $84 million based on 2016 EBITDA.

McBee, founded 1973, provides services to solve financial, operational and clinical challenges for providers across more than 875 hospitals and health systems, more than 2,400 home-health agencies as well as throughout hospice care and long-term-care facilities. 

Specific services include revenue-cycle process improvement, coding services, bundled payment solutions, PACT payment recovery and care management and more.

The company is led by CEO Marty Brutscher and employs more than 350.

TripleTree, Edina, Minnesota, has advised on numerous middle-market healthcare IT-related transactions. Other current engagements include Accel-KKR-backed healthcare-information exchange provider Vyne Medical, according to multiple sources, one of whom said recently that its process should soon be approaching the finish line.

The sales process for Vyne, which was first reported by The Wall Street Journal in January, is said to have garnered good interest and is likely to produce a sale to PE, according to sources. Even so, some buyers have struggled with the company’s  large exposure to the dental market, which has performed well but has only so much runway for growth, sources have said.

TripleTree was also hired last year to sell Marlin Equity PartnersSigmaCare, a provider of clinical software for long-term and post-acute-care facilities, as well as Francisco Partners T-System, the make of so-called T Sheet documentation for emergency medical care. Neither company has sold.

Representatives of McBee and Triple Tree did not return requests for comment.

Action Item: Email McBee spokeswoman Jessica McColgan:

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