Quantum Health, the Altaris–Capital–Partners– and GE–Ventures-backed patient-care-coordination provider, is working with William Blair to explore a potential transaction, two sources told Buyouts.
The most likely outcome of the process is a recapitalization by private equity, the sources said.
Update: A spokeswoman for Quantum Health in an email confirmed to Buyouts that the firm “is exploring a financial recap with a select group of PE firms. Management would roll a significant amount of their stock and will remain in position if a recap happens. In any case, the company will continue management’s strategic direction.”
The Columbus, Ohio, company generates revenue in the $70 million to $80 million range, one source estimated, and ought to command a multiple of EBITDA in the high-single-digit or low-double-digit range.
Founded in 1999 by CEO Kara Trott, Quantum Health provides consumer-focused healthcare programs to self-insured employers that help members navigate the healthcare system. The services help trim employers’ healthcare costs. Today the company serves more than 700,000 plan participants across the country.
In August 2015, Quantum Health made the Inc. 5000 list for the seventh consecutive year and for the eighth time since 2007, having grown 117% between 2011 and 2014. While growth has slowed a bit of late, the company should command interest, the sources said.
Quantum Health is viewed as a competitor of VC-backed Accolade Health, an on-demand healthcare concierge for employers, health plans and health systems.
In its latest round of funding, the Plymouth Meeting, Pennsylvania, company raised $71.1 million in an August 2015 Series E round led by Andreessen Horowitz and other participants including Madrona Venture Group.
The investment brought Accolade’s total equity funding to $163.3 million, according to Crunchbase. The latest financing round assigned the company a roughly $500 million valuation, added one of the sources.
GE Ventures, the Menlo Park, California, venture capital arm of General Electric, alongside New York’s healthcare-focused Altaris and co-investors Steven Shulman, Lawrence Leisure and physician Harlan Levine invested an undisclosed sum in Quantum Health in January 2014.
The company has since seen a handful of leadership changes, including the appointment of former Healthways exec Scott Doolittle as CFO in May 2016. Doolittle served as senior vice president of finance and operations at publicly traded Healthways (recently rebranded as Tivity Health) prior to the July 2016 sale of its population health business to digital-health company Sharecare.
Officials with GE Ventures, Altaris and William Blair could not immediately be reached for comment.
Action Item: GE Ventures’ Quantum deal lead Risa Stack: https://www.geventures.com/teams/member/risa-stack
Photo courtesy of Cecilie Arcurs/E+/gettyimages
This article has been updated with comment from Quantum Health.