L Catterton’s PatientPoint hires advisers for sale process

  • Sales process expected to launch later this fall
  • Searchlight Capital and Silver Point joined L Catterton as investors in ’17
  • PatientPoint competes with Outcome Health, the Chicago startup on the recovery from allegations of fraud last fall

PatientPoint, the fast-growing provider of point-of-care healthcare advertising and educational content, is gearing up for a sale, four people familiar with the matter told Buyouts.

The L Catterton-backed company has engaged William Blair and PJ SOLOMON for financial advice, the people said.

A sales process is poised to formally launch later this fall, one of the people said.

PatientPoint generates run-rate Ebitda north of $45 million, while trailing-12-month Ebitda is around $30 million, the people said. The company is expected to command an Ebitda multiple in the teens.

The auction is expected to encompass healthcare- and media-focused PE groups, in addition to strategics, sources said. Logical strategic suitors could include the likes of KKR’s WebMD, EveryDay Health and Hearst, sources suggested.

L Catterton’s investment in PatientPoint dates to 2007. Searchlight Capital Partners and Silver Point Capital in June 2017 joined as investors, injecting $140 million in the company. The investment valued PatientPoint at roughly $500 million, Reuters reported at the time.

Led by Co-Founder and CEO Mike Collette, PatientPoint sells educational content and ads in physician offices, exam rooms and waiting rooms.

PatientPoint said it is tracking to have a presence in more than 51,000 doctor offices and 1,000 hospitals by the end of 2018.

The idea is that PatientPoint gives pharmaceutical and other healthcare companies access to patients at the point of care.

The company demonstrates the effectiveness of its ad campaigns through third-party reports that measure changes in prescription levels in settings utilizing PatientPoint digital screens, one of the people said.

The concept is also compelling to doctors, in that patients are perceived to be better informed about diseases and treatments while their perceived waiting time is also minimized.

The process for PatientPoint comes about a year after competitor Outcome Health faced allegations of fraud just months after the hot startup scored a substantial capital infusion from a group of notable investors.

In May 2017, investors including Alphabet’s growth-equity fund, Pritzker Group and Goldman Sachs injected nearly $500 million into the Chicago startup, formerly known as ContextMedia. The startup reported a $5.5 billion valuation in connection with the funding.

The Wall Street Journal reported in October 2017 that Outcome had misled advertisers with manipulated information. The allegations ultimately led to an investors’ settlement against Outcome, following the departure of Founder Rishi Shah as CEO in January.

Another similar provider of digital point-of-care media is Health Media Network.

Representatives of L Catterton, William Blair and PJ Solomon declined to comment, while those with Outcome couldn’t immediately be reached.

Action Item: Learn more about PatientPoint