LLR’s LEARN Behavioral is up for sale in active autism-treatment segment

  • LLR investment dates to May 2016
  • Company’s ABA services are mostly home-based
  • Segment entrants: NexPhase, MBF Healthcare, Abry



LLR Partners is evaluating the sale of LEARN Behavioral less than three years after investing in the provider of autism-treatment and educational services, according to several people familiar with the matter.

Harris Williams is conducting the auction for LEARN, the people said, indicating the process kicked off in October.

The Baltimore company is being marketed off about $24 million of pro-forma adjusted Ebitda, some of the people said.

LEARN ought to benefit from scarcity value as the latest asset of scale in a segment in which private equity investment has accelerated, the people speculated.

Over the past 12 months, autism-treatment assets of size have commanded Ebitda multiples in the upper teens or upward of 20x, depending on which earnings figure is applied.

LEARN provides treatments to children with autism and other special needs, including speech-language therapy, occupational therapy and individual and family counseling.

A majority of its applied behavioral analysis, or ABA, therapy is provided in home settings, with a smaller portion of services offered in centers and schools.

The company in May changed its name to LEARN Behavioral from Learn It Systems, reflecting what the company said at the time was its focus on the behavioral-health market and, more specifically, ABA therapy.

Still, with roots that came out of the education system, a large chunk of the business is composed of education services such as tutoring and academic intervention programs, sources said.

It’s unclear how sizable or profitable that piece of the business is.

LEARN was founded in 2007 by CEO Michael Maloney, who previously helped establish Catapult Learning’s No Child Left Behind program in more than 50 school districts nationwide.

Philadelphia-based LLR bought LEARN in May 2016 from Milestone Partners.

LEARN has expanded through its own M&A efforts, including bolstering its ABA therapy services in the Midwest and Pacific Northwest through three transactions in October.

The company scooped up Total Spectrum of Elmhurst, Illinois; Milwaukee’s Wisconsin Early Autism Project; and Play Connections Autism Services of Beaverton, Oregon.

The auction for LEARN follows a flood of private activity in the autism segment over the past few years, as demand for treatment services grows and an evolving reimbursement market requires greater institutionalization.

In October alone, NexPhase Capital recapitalized Action Behavior Centers, MBF Healthcare Partners launched Acorn Health alongside industry entrepreneur Vicki Kroviak, and Abry Partners injected capital into Lighthouse Autism Center.

The biggest bet to date came in April, when Blackstone surfaced as the winning bidder in the process for Center for Autism and Related Disorders in a deal valued at around $600 million.

The deal came after Jefferson River Capital, Tony James’s family office, unloaded the second-largest player in the sector after CARD, Autism Learning Partners, via a sale to FFL Partners.

ALP, whose other selling shareholders were Scopia Capital Management and Great Point Partners, commanded a valuation north of $270 million, Buyouts reported.

Providing even further validation to the sector, KKR in January announced an investment in Blue Sprig Pediatric through its $1.45 billion strategic growth fund.

Representatives of LLR and Harris Williams didn’t return requests for comment.

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