Parthenon Capital Partners is inching toward the sale of yet another portfolio company, three people familiar with the process told Buyouts.
The growth-oriented private equity firm is approaching the conclusion of what was said to be a sponsor-driven sales process for Bracket Global, the provider of technology-driven clinical-trial-support services that it bought from pharmacy-benefit manager Express Scripts in August 2013.
San Francisco buyout firm Genstar Capital is said to be among those in the final round of the process, according to two of the sources, one of whom said Jefferies is advising the sellers.
The Wall Street Journal reported in September that Parthenon planned to interview bankers for a potential sale process after Labor Day.
Bracket Global likely generates EBITDA in the ballpark of $35 million and ought to command a multiple of about 14x, estimated one of the sources, suggesting a likely valuation just below $500 million.
Led by industry veteran and CEO Jeff Kinell, Bracket helps train people tasked with rating programs like clinical trials — known as rater training. These programs provide research professionals with methods to interview, evaluate and monitor patients in trials using subjective scales, typically centered on treatments for central-nervous-system- or pain-related diseases.
Bracket also offers eCOA, or electronic clinical outcomes assessments. Here, a mobile-device app is used as a platform for patients to report and track outcomes in diaries. The Wayne, Pennsylvania, company also offers randomization and trial-supply-management services.
The Parthenon-backed company seems to be looking to ride the tailwind of recent transactions in the sector, which have scored impressive valuations and significant buyer interest, the sources said. They cited Genstar’s sale of eResearch Technologies and Water Street Healthcare Partners‘ and JLL Partners’ sale of BioClinica.
Genstar sold ERT, whose services also include eCOA, to U.K. sponsor Nordic Capital in March 2016 following an auction conducted by Jefferies’ Michael Gerardi. That auction included both sponsors and strategics.
Terms of the transaction weren’t disclosed, but the deal was valued at nearly $1.8 billion including debt, producing an about 8x return on investment for Genstar, sources familiar with the matter said at the time.
Jefferies’s Gerardi and colleague Matt Miller subsequently conducted a robust auction composed of large U.S. and European sponsors for clinical-trial-services provider BioClinica, ultimately selecting London’s Cinven Ltd as the winning suitor. Terms weren’t disclosed, but the deal commanded an enterprise value of $1.4 billion, sources familiar with the process said then.
Both BioClinica and ERT would have also made logical buyers for Bracket Global, as would providers of IRB, or independent review board, services like Chesapeake IRB or WIRB-Copernicus Group, one of the sources said. Bracket Global would also fit well with a contract research organization, or CRO, like industry giant QuintilesIMS, another source added.
Bracket has supported growth through M&A, adding CLINapps, a software-development and consulting firm serving the pharma and biotech industries, in November 2016, and rater-training business Clintara in June 2015.
Bracket’s Kinell, who took the helm in October 2014, previously led CRI Lifetree through its sale to CRO company PRA in November 2013.
Parthenon, for its part, of late has been an active seller.
The firm’s auction for Eliza came to a head on Monday, as healthcare-IT company HMS Holdings announced a $170 million deal to acquire the provider of patient- engagement services. The announcement came after Buyouts reported in February that William Blair and FT Partners were conducting a sales process for PE-backed Eliza.
Parthenon, with offices in Boston and San Francisco, is also shopping 401(k) administrator Millennium Trust via William Blair, Buyouts reported in February.
Parthenon’s fifth flagship 2016 closed at its $1 billion hard cap in 2016. Parthenon’s fourth pool raised $700 million in 2012.
Parthenon and Bracket representatives did not return requests for comment on Monday, while a Genstar spokesman declined to comment.
Action Item: Contact Parthenon managing partner David Ament: +1 617-960-4088
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