Partners Group bought back Careismatic Brands from New Mountain Capital, concluding a swift three-month auction process for the medical apparel company.
The deal values Careismatic Brands just below $1.3 billion, a source told PE Hub.
The PE firm formerly invested in the healthcare apparel brand in 2012 under the name of Strategic Partners, post which the company diversified its customer base, rebranded and entered new business lines.
“We kind of turned it [the process] off mid-stream,” said Chris Russell, managing director of the private equity group’s technology unit. The PE firm was able to preempt the process because of the comfort and familiarity the groups shared.
The Swiss Exchange-listed firm began informal conversations with CBI before the October auction and closed the deal on Tuesday within a short timeframe. A letter of intent was signed early December.
New Mountain Capital bought the Chatsworth, California-headquartered company from Partners in 2016.
Under the New York-based firm’s four-year investment period, New Mountain supported material changes at CBI, investing behind add-ons and making a push into e-commerce, according to Partners’ Russell.
Partners, first time around, was part of CBI’s phase 1 growth, which included directly selling to specialty stores. It’s a different more solidified business now, he said.
Partners invested equity from the Partners Group Direct Equity 2019 fund, while senior debt financing was provided by UBS Investment Bank.
Baird, Jefferies and UBS acted as financial advisors to CBI and New Mountain, according to the press release.
CBI is part of a larger healthcare effort that Partners kicked off two years ago, Russell said, pointing to the three physician practice acquisitions completed in 2019: Confluent Health, a physical therapy services provider; Blue River PetCare, a chain of veterinary hospitals; and EyeCare Partners, a medical vision services provider.
Partners last month also purchased New Harbor Capital’s Wedgewood Pharmacy, one of the largest providers of compounded animal medications for acute and chronic conditions in the country.
With more than $96 billion AUM, Partners views the over 25-year-old company as a defensive growth type of investment, “because the demand of nurses and scrubs keeps going up,” Russell said, highlighting covid-19’s positive impact on the healthcare market.
To address the pandemic, the global uniform distributor stocked up its inventory early on and launched a laundry additive called Certainty Smartboost that contains a microbe-killing ingredient.
Beyond medical apparel, CBI has entered verticals like school uniforms, adaptive apparel, corporate identity uniforms, medical devices and accessories, and more.
To build on the current momentum, the new PE owners will continue to improve the sales channels, optimize the supply chain and work on accretive acquisitions. Finding and auditing ESG relevant manufacturing partners will be a key theme for CBI’s supply chain in the near future, Russell added.
For New Mountain Capital, the sale comes on the heels of two sizable exits.
The firm in December agreed to sell Cytel, a tech- and data-driven pharma services business, to Nordic Capital and Astorg for approximately $1 billion, sources familiar with the matter told PE Hub.
Just days later, the firm sold Sparta Systems for $1.3 billion in cash to Honeywell. Sparta is a provider of enterprise quality management software for pharmaceutical, medical device and consumer products industries.
New Mountain Capital declined to comment.