Comprehensive Eye Care, a newly formed vision-care provider in the Southwest, has selected a private equity partner, four sources familiar with the situation told Buyouts.
Four separate businesses are being combined to create the Nevada-concentrated platform, which will represent the largest provider of ophthalmic-services in the state, two of the sources said. The identity of the PE investor is unclear.
The deal should close in about 1 1/2 months, one of the people said.
Comprehensive Eye is projecting adjusted pro forma EBITDA of about $18 million for 2017, according to two of the sources.
While the combined entity is expected to fetch an EBITDA multiple north of 12x, one of the sources noted that the businesses would have traded within a EBITDA range of 6x and 8x on an individual basis.
An EBITDA figure in the high teens suggests the platform is set to command a $200 million-plus valuation.
The Franklin, Tenn., middle-market investment firm Brentwood Capital Advisors is advising the vision company, according to two of the sources.
The businesses that will operate under Comprehensive Eye Care offer services including cataract and retina surgeries, glaucoma treatment, as well as traditional eye exams and optometry services, according to one of the sources.
Three of the four entities are already associated through an independent physician association, another of the sources said. An IPA’s members are able to negotiate more favorable payer contracts and reduce administrative burdens, among other things.
Recent sizable activity in the vision space includes Varsity Healthcare Partners’ late-May sale of a majority stake in EyeCare Services Partners to Harvest Partners. ESP was said to have commanded a mid-teen multiple of its at least $22 million in projected run-rate EBITDA, implying a valuation around $330 million.
Centre Partners in July invested in Chesapeake Eye Care, concluding a Coker Capital process for the roughly $6 million-EBITDA company.
H.I.G. in April bought SouthWestern Eye and Barnet Dulaney Perkins, the former of which was advised by Intrepid Investment Bankers. The Arizona eye-surgery companies are said to generate combined EBITDA of $10 million-plus, sources said at the time.
In February, Sterling Partners emerged as the winning suitor for Michigan’s Grand Rapid Ophthalmology, while Waud Capital scooped up Minnesota Eye.
A Brentwood representative declined to comment.
Action Item: Brentwood’s representative transactions: www.brentwoodcap.com/results/transactions/
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