Latticework scores 6.5x MOIC on American Veterinary Group, CCMP’s Eating Recovery Center taps adviser for sale process

Oak Hill Capital completes buyout of American Veterinary Group and CCMP prepares to sell Eating Recovery Center.

Happy Friday!

As we inch toward the weekend, private equity preps for another behavioral health sale process, vet care proves a winning pocket of investment once again, and tech specialist K1 Investment Management racks in more than it was planning for its latest fund as industry growth booms.

On the horizon: Almost four years into its investment, CCMP Capital is preparing for a sale of Eating Recovery Center later this year, according to people familiar with the firm’s plans.

Moelis, which advised on the Denver company’s last sale process, has been retained for financial advice, sources said. A process is not imminent, they said.

Much like the broader behavioral health industry, demand for eating-disorder treatment is on the rise, and according to the World Health Organization, 9 percent of the population worldwide is affected by the latter.

CCMP, a New York-based private equity firm, bought ERC in August 2017 in a $580 million deal, sources said. Interestingly, the deal was CCMP’s latest new investment in healthcare, as well as its last remaining healthcare investment. Even so, the industry vertical remains one of the firm’s three focus areas in addition to consumer and industrial, a source told PE Hub.

Read more about the upcoming process on PE Hub.

Big return: Investing behind the veterinary industry has once again proven a smart place to park private equity money.
As Oak Hill Capital completes its acquisition of American Veterinary Group, selling shareholder Latticework Capital Management is realizing a 6.5x multiple on invested capital and 82 percent IRR. Not too shabby.

M&A was a big driver of expansion under its former Dallas-based owner, with AMG clinching 40 successful acquisitions since its founding investment – growing from one location to nearly 50. The company has also set itself apart through its urgent care model, which is relatively unique in the broader vet market. Read more here.

Indicating strong appetite for the business, PE Hub first wrote in February that Oak Hill had preempted a Harris Williams-run sale process for AVG, with a transaction anticipated to be valued around $400 million-plus.

For Oak Hill, the transaction comes after the firm in 2020 quietly exited its investment in one of the country’s largest vet care chains, VetCor – generating a nice gain after a short hold, four sources said. Although an announcement was never made, three sources told PE Hub that Oak Hill sold its stake back to fellow VetCor shareholder Harvest Partners.

That’s it for me! Have a great weekend, and as always, hit me up at springle@buyoutsinsider.com with your comments, tips and anything else!