Nautic’s Odyssey Behavioral Health evaluates sale

  • PE firm formed Odyssey in partnership with CEO Kardenetz in ’15
  • Auction seen producing low-to-mid-teens multiple
  • Also for sale: Frontenac’s Behavioral Health

Odyssey Behavioral Health, the Nautic Partners-backed provider of mental health and addiction treatment, is on the auction block, four people familiar with the matter said.

The Brentwood, Tennessee, behavioral-health company has turned to Moelis for financial advice, the people said. The process is past its first rounds, with management meetings currently ongoing, three of the people said.

Nautic’s investment in Odyssey dates back about three years. The newly formed partnership between the firm and an industry veteran, CEO Scott Kardenetz, was announced in July 2015, when Odyssey closed its first two platform deals, Pasadena Villa and Lifeskills.

Nautic and Odyssey management said at the time they planned to invest up to $50 million of equity capital to support growth.

Odyssey operates five facilities offering adult residential and outpatient treatment care in Florida, Tennessee, Alabama and Indiana. The facilities treat individuals with complex psychiatric conditions, and they customize care for substance abuse and addiction.

The company generates around $20 million in Ebitda, three people said. One of the three said a multiple of Ebitda in the 12x to 15x range is expected. Another agreed, suggesting the auction ought to produce a deal valued at a low-double-digit multiple or better.

Christopher Corey and Scott Hilinski, Nautic managing directors, are listed as associated investment team members, alongside Vice President Keith Farrow.

As the auction for Odyssey heads into its second round, another behavioral-health provider is prepping for a sale.

Behavioral Health Group from Chicago’s Frontenac engaged Piper Jaffray to advise the opioid-treatment-network on a sales process, Buyouts reported earlier this month.

Representatives of Nautic and Odyssey didn’t return requests for comment. A Moelis spokesperson declined to comment.

Action Item: Reach out to Jim Beakey, Nautic’s head of business development, at jbeakey@nautic.com