Candescent Partners recently co-led an acquisition of Center for Wound Healing and Hyperbaric Medicine, an operator of a dozen advanced-wound centers in the Midwest, Mid-Atlantic and Florida. It was the Boston-based private equity firm’s first deal since being (quietly) formed late last year by Steve Jenks and Sandy McGrath, former managing partners with Capital Resource Partners.
Jenks says that the transaction, done in partnership with Gemini Investors and Harbert Mezzanine Partners, is representative of the types of deals Candescent is looking for.
“We want to invest in healthcare services, business services, software and some selective consumer product services companies — with an emphasis on the healthcare and business services,” Jenks explains. “We publicize that we want companies with between $10 million and $50 million in revenues, but 90% will be between $10 million and $30 million with between $2 million and $5 million in EBITDA. These are companies in the lower part of the lower middle-market, and the investments can be acquisitions, significant recaps and growth financings. It’s effectively what we were doing at Capital Resource Partners, but with a little more of a control focus.”
Most deals are expected to be close to the East Coast, but Candescent has relationships in places like Denver and Texas. “If an investment slides us from the West Coast, we’ve got to ask how it got past everyone else,” Jenks says.
Candescent currently is structured as a fundless sponsor, which means it solicits investors on a deal-by-deal basis. Not terribly surprising, given that Jenks and McGrath left CRP, in part, because they weren’t enthused about an upcoming drive that Jenks says would have been “in an environment that is challenging at best.”