NThrive, the Pamplona Capital Management-backed healthcare tech and services company, is evaluating the sale of its software business, four sources familiar with the situation told PE Hub.
Barclays and Goldman Sachs are advising on the process, and indications of interest are due next week, the sources said. Both sponsors and strategic buyers could be in the mix.
The Alpharetta, Georgia, business is marketing approximately $90 million in adjusted Ebitda. While the process is in its early phases, the company hopes to fetch a double-digit multiple, some of the people said. One factor that potential buyers will consider in their valuation is the significant capital expenditures in the business’s Ebitda figure.
In addition, much of what Pamplona gets for the business is likely to go towards paying down nThrive’s $700 million or so debt load.
Pamplona, a London- and New York-headquartered buyout shop, formed nThrive a little over four years ago through a highly complex deal structure.
The firm in November 2015 agreed to acquire MedAssets for an enterprise value of approximately $2.7 billion, combining its revenue cycle management segment with existing portfolio company Precyse. Pamplona simultaneously divested MedAssets’ group purchasing organization and performance-improvement business through a sale to VHA-UHC Alliance.
While the creation of NThrive was viewed as audacious and impressive structurally speaking, the company hasn’t been a consistent performer since, sources said. The services side of the business has struggled, while the tech side has been a slow grower.
NThrive, which serves hospitals and health systems, provides revenue cycle technology and services, patient access solutions, patient financial solutions, value-based care tools, healthcare education tools and analytics.
Interestingly, nThrive CEO Joel Hackney, who joined the company in January 2016 shortly following the Pamplona investment, doesn’t come from a healthcare background.
The executive most recently worked as the CEO of specialty materials company Avintiv, leading it through Blackstone Group’s $2.45 billion sale of the company to Berry Plastics Group. Hackney previously held leadership positions at business communications company Avaya, telecom company Nortel and General Electric.
Pamplona, Barclays and Goldman Sach declined to comment. NThrive didn’t return requests for comment.
Action Item: Reach nThrive at (678) 323-2500