Numotion, backed by Audax and LLR, hires adviser for 2018 process

  • Harris Williams wins sell-side mandate
  • Numotion created in 2013 merger of LLR’s United Seating & Mobility, Audax’s ATG Rehab
  • Company makes personalized manual and power wheelchairs, other mobility products

Numotion, the complex rehabilitation technology company jointly owned by Audax Group and LLR Partners, is expected to return to the auction block next year, three sources familiar with the matter said.

Harris Williams has been hired to advise on a sales process for the Brentwood, Tennessee, company, the sources said.

While nothing formal is imminent, a process will likely launch in Q1 or Q2 2018, two of the sources said. Numotion remains focused on integrating acquisitions and operational improvements, one source noted.

Numotion was formed in 2013 through a merger of equals between LLR’s United Seating & Mobility and Audax’s ATG Rehab. The initial investments for each sponsor date back to early 2011.

The company provides complex rehab technology products that assist adults and children suffering from long-term or permanent mobility loss. Numotion is perhaps best known for its personalized manual and powered wheelchairs and associated parts. The company also provides other mobility devices that require evaluation, fitting, configuration, adjustment or programming.

Numotion — which employs more than 2,400 and encompasses 130-plus locations — deems itself the largest provider in the complex rehabilitation technology market.

The other CRT player of scale is National Seating & Mobility, which Court Square Capital Partners in August 2016 agreed to buy from Wellspring Capital Management.

Terms weren’t disclosed, but the Piper Jaffray– and Cain Brothers– run process for National Seating & Mobility produced a deal valued a little south of $400 million, sources said at the time. NSM in 2016 generated EBITDA and revenue of roughly $40 million and $300 million, respectively, one of the sources noted.

Trade publications have placed Numotion’s sales at $500 million-plus.

Court Square’s NSM is arguably the most logical buyer for Numotion, though it could also fit the bill for other durable-medical-equipment the likes of Clayton, Dubilier & Rice’s Drive DeVilbiss, one source said.

New York’s CD&R in August 2016 agreed to buy a majority stake in Drive, marking a quick exit for former backer Ferrer Freeman. Reuters reported the deal was expected to produce an enterprise value of about $750 million.

The CRT market and broader DME category are viewed as another way for PE to invest in patients’ increasing preference for home-based care.

A number of sponsors have invested in the DME industry, including Blackstone Group, Nordic Capital, Water Street HealthCare Partners, Quad-C Management, Tailwind Capital, among others.

At the same time, potential changes that could occur within Medicare’s competitive bidding program are viewed as a potential risk in the space.

Under the program, suppliers submit bids to provide certain medical equipment to people with Medicare in certain areas. CRT power wheelchairs are currently exempt, but if that policy were to change, suppliers like Numotion and NSM would face reimbursement pressure, one source said.

Representatives of Audax and LLR declined to comment. A Harris Williams spokesperson didn’t immediately respond to a request for comment, while Numotion executives couldn’t be reached.

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