Monroe Operations, which does business as Newport Academy, is up for sale, three sources said.
Moelis & Co is advising on the auction, one of the sources said.
Newport, Orange, California, treats teens with mental-health issues, eating disorders and substance abuse. Jamison Monroe, a recovering addict, launched Newport in 2009 and is founder and CEO.
Newport produces $20 million EBITDA, sources said. The company could fetch 6x to 7x because Newport’s business is “100 percent out of network,” one GP said.
How many centers Newport has or how many people it employs is unclear. Newport does, however, employ several psychiatrists, counselors and even what it calls equine therapists — therapy horses, the website said. A typical 75-day stay at Newport can cost more than $75,000, Barron’s reported.
The Affordable Care Act has helped fuel PE interest in the addiction space. The law required insurers to cover mental-health and substance-abuse disorders as they would any medical disorder. Final regulations dictating mental-health coverage went into effect in early 2014.
Several PE firms have invested in the addiction sector. Riverside Co in December acquired Lakeview Health, while Pharos Capital Group in November bought Logan River Academy.
Centre Partners also invested in Bradford Health Services in June. North Castle Partners, Audax Private Equity, Deerfield Management Co and Kohlberg Investors have also all invested in the space.
Newport Academy could not be reached for comment. Moelis declined to comment.
Action Item: Contact Jamison Monroe at +1 714-288-0872.
Photo courtesy ©iStock/KatarzynaBialasiewicz