MedXM, health-risk-assessment firm, seeks PE partner

MedXM, the provider of in-home health assessments used to bill Medicare, is seeking a private equity partner, according to four sources familiar with the matter.

JMP Securities is conducting the sponsor-focused sales process for the founder-owned company, the sources said. Second-round bids for MedXM are due the third week of June, one source said.

MedXM generated about $16 million of adjusted EBITDA on $51 million of revenue in 2016, marketing materials obtained by Buyouts show. The company earlier this year estimated $22 million of adjusted EBITDA and $59 million of revenue for 2017.

The company is hoping to fetch about a $75 million equity check in a deal assigning the company an enterprise value of $150 million to $200 million, one source said. A second source said $150 million likely represents the high end of the enterprise-value range.

CEO Sy Zahedi, who founded MedXM in 1990, wants to stay involved with the company and retain a sizable position, two sources said.

MedXM, Santa Ana, California, sends physicians to visit seniors at their homes to do health exams. Services include specialized evaluations for conditions like osteoporosis and spirometry, a common lung-function test. It also has about 30 retail clinics that offer assessments.

No treatment is provided at the visits, which are free to patients. Instead, doctors identify and document health issues that managed-care plans then use to adjust an individual’s “risk score.” Simply put, patient data is collected and used by private health plans to bill Medicare.

Ancillary services include, among other things, post-hospital discharge visits and identification of invalid data.

Its latest new offering is a partnership with ride-sharing service Lyft, announced in May. The collaboration will enable members to use an app to get to and from health-assessment appointments and access for transport for other health-related needs.

MedXM isn’t the only provider of in-home physician-conducted health assessments exploring options.

Health Evolution Partners-backed CenseoHealth is working with Goldman Sachs to weigh a potential sale, Buyouts reported. The Dallas company generates around $40 million of EBITDA and could command a multiple of 9x or so if it trades, one source speculated.

Other competitors include include Matrix Medical, which Welsh, Carson, Anderson & Stowe in October 2014 sold to Providence Service Corp for $400 million. Frazier Healthcare Partners acquired a 60 percent equity interest in Matrix in an October 2016 deal that valued the company at about $538 million.

Another peer is Advance Health, which secured $40 million in funding from Summit Partners and Noro-Moseley Partners in January 2015. Besides a number of smaller players, insurers have increasingly brought in-home medical assessment in-house.

Representatives of MedXM and JMP did not return requests for comment on Thursday.

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