Autism Learning Partners is approaching a sale that sources expect will produce a big-ticket price for the provider of applied behavior analysis therapy for children with autism.
ALP, backed by Great Point Partners, Jefferson River Capital and Scopia Capital Management, is receiving financial advice from Berkery Noyes & Co on the process, three of five sources familiar with the process said.
Great Point Partners, Greenwich, Connecticut, invested in the company, then called Pacific Child & Family Associates, in 2010. A November 2016 announcement disclosing ALP’s add-on deal for Proof Positive ABA Therapies showed that Jefferson River is now the largest investor in the company. Jefferson River is a New York family office focused on lower-middle-market private equity.
ALP has either signed a letter of intent or is close to signing one, sources said. Price talk for the asset is around a multiple of EBITDA of at least 14x, two sources said.
The autism-treatment provider generates close to $10 million of EBITDA on a trailing 12-month basis, whereas the company is forecasting roughly $18 million of EBITDA in 2018, one of the sources said.
Another source said ALP was expected to command a valuation north of $200 million.
ALP, Glendale, California, provides applied behavioral analysis services to children with autism-spectrum disorder and other developmental disabilities in 32 states, according to its website. Other services include speech, occupational and physical therapy services.
Services offered by ALP are largely home-based, as opposed to large groups operating treatment centers like Center for Autism & Related Disorders or players, like Invo Healthcare Associates, that provide long-term placement of therapists throughout schools, sources noted.
Sponsors are flocking to all three models as the sector — not unlike opioid addiction treatment — is characterized as sharply fragmented, in huge demand and growing rapidly. As the market matures, it’s likely to see some blending of the different models of care as investors look to build larger companies, one source noted.
ALP is also likely to benefit from scarcity value as one of few platforms of real scale.
Summit Partners’ expected investment in CARD is said to have sparked even more interest in the sector from larger PE firms.
Buyouts reported in December 2016 that the growth equity firm was investing in the Chula Vista, California autism-treatment provider in a deal valued at $300 million. Whether that deal closed is unclear.
Notable deals in the space this year included MTS Health Investors’ March recap of Trumpet Behavioral Health and Jordan Co’s May investment in Invo.
Other recent investments include Petra Capital Partners’ and MMC Health Services’ acquisition of Alternative Behavior Strategies earlier this month, as well as Shore Capital’s June recap of Behavioral Innovations.
Jeffrey Winter heads up ALP as president and CEO, having joined the company from Kindred Healthcare’s hospital division. Winter succeeded Mark Dorenfeld, who was appointed CEO in September 2011. Dorenfeld had succeeded the founder, Dr. Ira Heilveil.
Representatives of ALP, GPP, Jefferson and Scopia did not immediately return requests for comment on Monday.
Action Item: Reach Great Point Managing Director Adam Dolder at firstname.lastname@example.org
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