Leonard Green’s ExamWorks explores $4bn-plus sale

Truist is advising on the sale process, with limited parties in the running including a Carlyle and CVC partnership, sources tell PE Hub.

Leonard Green & Partners is evaluating a sale of ExamWorks that could ultimately value the provider of independent medical examinations at more than $4 billion, according to sources familiar with the process.

Truist Securities is providing financial advice on the sale process, which involves conversations with a small group of potential suitors, including Carlyle and CVC Partners, which are jointly looking at the company, sources said.

Carlyle and CVC, already co-investors in workers compensation company MedRisk, are evaluating an acquisition of the Atlanta-based company as an independent platform, sources said. Carlyle also knows ExamWorks through existing portfolio company Sedgwick, a provider of technology-enabled claims management solutions for workers’ compensation and other markets. Sedgwick divested its group health peer review independent medical examination assets to ExamWorks in 2020. 

First round bids have been submitted and a deal could be reached as soon as early June, some of the people said. 

Sources placed EBITDA in the $300 million to $340 million range, estimating the deal could ultimately be valued between $4 billion and $4.5 billion. The company could be levered at up to 6x, one person said.

The estimated price implies ExamWorks has close to doubled in value under LGP. The West Coast private equity firm bought ExamWorks in a take-private transaction valuing the business at approximately $2.2 billion in April 2016. GIC Private is also an investor in ExamWorks, according to ratings agencies

ExamWorks is considered a unique asset, with a leading market share and no clear second competitor, one of the people said. Future growth levers might include international expansion and the opportunity to cross-sell new product lines into the same customer base, this person said. 

ExamWorks provides independent medical examinations, peer reviews, bill reviews, Medicare compliance, case management, record retrieval, document management and related services. The company helps healthcare payers manage costs and improve risk management processes

Customers include property and casualty insurance carriers, law firms, third-party claim administrators and government agencies. Clients use its independent services to confirm the veracity of claims by sick or injured individuals under automotive, disability, liability and workers’ compensation insurance coverages.

LGP, Truist and Carlyle declined to comment. GIC, ExamWorks and CVC did not immediately return requests for comment.