Martis Capital is seeking a buyer for Care Hospice, a provider of end-of-life care, according to people familiar with the matter.
Harris Williams is providing financial advice on the process, sources said. Marketing materials have been distributed to a narrow group of potential bidders over the last couple weeks, targeting parties that had already expressed interest in the hospice care operator.
The auction aims to produce a deal valued around 12x EBITDA, one of the people said, cautioning that Martis may opt to hold Care if price expectations are not met.
Care generates EBITDA in the $40 million-$60 million range, depending on how add-on activity and integration of recent acquisitions are viewed. The platform has executed around 10 add-ons under the backing of Martis. The midpoint of that range would imply a potential valuation in the ballpark of $600 million.
Founded in 2008 by CEO Brad Hunter, Care has grown to over 60 locations across 11 states. The company comprised 24 locations across eight states at the time of Martis’ April 2017 investment.
Headquartered in Charlottesville, Virginia, Care focuses on underpenetrated, highly populated secondary and tertiary markets.
Martis, formerly Capricorn Healthcare, is based out of San Francisco and Washington, DC. The private equity firm invests exclusively in growth-oriented healthcare companies in the middle market.
In recent exits, Martis unloaded its investment in Centria Healthcare via sale to Thomas H. Lee Partners. The transaction assigned the autism-treatment provider a total enterprise value of approximately $415 million, PE Hub wrote.
As hospice care has proven a steady performer through the downturn, other dealmaking in the space is anticipated.
St Croix, the Vistria Group-backed operator of hospice care, is working with Houlihan Lokey as it evaluates a sale, the Wall Street Journal reported earlier this month. St Croix expects to produce approximately $30 million in 2020 EBITDA, the report said.
The process for St Croix remains in its early stages, sources told PE Hub.
Other providers of hospice care to keep tabs on include Bristol Hospice, a portfolio company of Webster Equity. Webster in 2017 acquired Bristol at an enterprise value just north of $70 million, sources told PE Hub at the time.
There’s also Abode Healthcare, which Tailwind Capital Partners bought from Frazier Healthcare Partners in April 2018.
Martis declined to comment. Care Hospice and Harris Williams didn’t return requests for comment.
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