HST Pathways, a fast-growing software company catering to the ambulatory surgery center market, is nearing a sale, according to multiple sources familiar with the matter.
The anticipated deal is set to conclude a sale process run by Piper Sandler.
Clearlake Capital’s Provation is a finalist in the process, sources said, with other PE-backed strategics said to be in the late stages. Pure-play sponsors were in the mix early on, some of the people said.
A transaction is likely to be valued in the range of $175 million to $200 million, two people said.
The privately held company is generating approximately $25 million of run-rate revenue and is breakeven, with top-line growth around 30 percent, one person said. From a strategic buyer perspective, synergized EBITDA may be viewed at about $10 million, another source added.
HST Pathways, founded in 2005 by CEO Tom Hui, provides software solutions for single and multi-specialty ambulatory surgery centers [ASCs], corporate management companies, hospital outpatient surgical facilities, ASC revenue-cycle management companies, and outpatient cardiac facilities.
Software solutions include surgical scheduling, inventory management, EHR clinical workflow, billing and collections and comprehensive reporting.
Those aggressive in the process for HST Pathways likely see an opportunity to own the ASC vertical within the broader EMR and practice management space, sources said.
The ASC market is “only a market that’s so big [but] they are well on their way to becoming the go-to player,” one source commented. HST Pathways is rapidly taking share from incumbent players, this person said.
For example, WellSky, backed by TPG Capital and Leonard Green & Partners, is the predominant provider of EHR to post-acute-care settings including the home. Whereas dermatology practice management and EHR is largely dominated by Warburg Pincus-backed Modernizing Medicine – which serves a vast range of specialty markets.
Provation, whose software helps physicians and other healthcare professionals document medical procedures more efficiently, has a large concentration in gastroenterology. The platform in September added ePreop, broadening its solutions for ASCs and hospitals.
Clearlake and HST Pathways declined to comment. Piper Jaffray didn’t return PE Hub’s requests for comment.
Action Item: Read more about WellSky’s recent purchase of CarePort.