OMERS prevails in auction for PE-backed Premise Health

  • Water Street invested in Premise in June 2014
  • Nashville company manages > 500 employer-sponsored health and wellness centers
  • OMERS investments in multisite space: NVA, Forefront, CBI

OMERS Private Equity has claimed victory in the hotly contested auction for Water Street Healthcare PartnersPremise Health, five sources familiar with the matter said.

The anticipated deal for the provider of employer-sponsored health centers is said to have commanded a valuation of close to $1.1 billion.

That equates to a mid-teens multiple of the company’s trailing-12-month Ebitda in the mid-$70 million-range, some of the sources said.

Water Street tapped Harris Williams earlier this year to explore a sale of the Nashville company, Buyouts reported in May.

The process garnered significant private equity interest, while at least one strategic buyer was said to have been in the mix, sources said.

Led by CEO Stuart Clark, Premise provides primary-care services for its partner employers in the work setting, as well as occupational-health programs and onsite pharmacies, among other things. The company says it manages more than 500 employer-sponsored health and wellness centers across the country.

The worksite health company is considered the clear leader in this segment of the market and has a strong management team, while its multisite nature is a model that sponsors have continued to flock to, sources said.

At the same time, organic, same-store growth isn’t particularly strong, so expansion into new areas will be important, they said.

One possible opportunity could be creating a referral network such that Premise can negotiate rates with payers, suggested one of the sources. \

Another pointed to the recent hiring of a former leader of a DaVita unit, Jami Doucette, who was brought on to push the company into new markets such as population health management or telemedicine, the source said.

And the company has already diversified into new areas via its own M&A efforts. Add-ons include eHealthScreenings, which offers biometric screenings, as well as TransformHealthRx and IMWell Health.

Water Street’s investment in Premise dates to June 2014. The Chicago PE shop formed Premise through simultaneous investments in CHS Health Services and Take Care Employer Solutions, a Walgreen’s subsidiary.

For OMERS, the purchase aligns with the Canadian pension fund’s previous investment experience in healthcare, having focused largely on physician-oriented and multisite healthcare models facing minimal reimbursement risk.

For instance, OMERS in June 2017 injected a minority investment in National Veterinary Associates, while existing investor Ares Management reinvested in the country’s largest private operator of vet chains.

OMERS bought Forefront Dermatology from Varsity Healthcare Partners in 2016, the same year it sold Great Expressions, another dental company, to Roark Capital Partners.

It also owns CBI Health Group, a Canadian provider of outpatient rehab and home health services.

Representatives of OMERS, Water Street and Harris Williams didn’t immediately return requests for comment.

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