PE expected to win auction for healthcare-software provider Kinnser

Kinnser Software, the Austin, Texas, provider of online-home-health software backed by Insight Venture Partners and Georgian Partners, is exploring a potential sale, according to sources.

William Blair is said to have scored the mandate to sell the company, two sources familiar with Kinnser said. One source said pitchbooks for the company published in March.

Both sources and a third who had also heard Kinnser was coming to market said the process is likely to produce significant interest from private equity. GPs ought to be attracted to the target’s strong growth profile, leadership team and attractive end market: post-acute care, the sources said.

There are only a few logical strategic buyers for Kinnser, like NetSmart’s HealthMEDX subsidiary or PointClickCare Technologies, which recently opted out of an IPO, one source said. Other strategics in the space: MatrixCare, as well as Roper Technologies and Hearst subsidiaries that offer software tailored to the post-acute healthcare market.

Founded in 2013 by President Christopher Hester, Kinnser offers web-based services to facilitate more efficient scheduling, billing, productivity and documentation in the home-care market. The company, which licenses its products to customers via a monthly subscription model, serves more than 2,100 home health agencies, therapy companies, hospice facilities and private duty care providers.

Insight Venture Partners injected $40 million in Kinnser in March 2012 in a Series A round. In August 2014 IVP co-invested alongside fellow growth equity firm Georgian in a round that totaled $39.1 million, according to Crunchbase.

The company posted revenue of $45 million for 2015, up 36 percent from $33 million in 2014. While current financials are unknown, one source said the company likely generates EBITDA margins of 20 percent to 30 percent.

Kinnser has grown partly through M&A, scooping up fellow home health software companies including VisiTrack, PPS Plus and ADLware.

Recent activity in the space includes an $85 million investment in PointClickCare — whose cloud-based software serves the long-term post-acute and senior living markets — from Dragoneer Investment Group and JMI Equity, announced in early February.  In connection with the funding, PointClickCare, with about $160 million in 2016 revenue, opted out of an IPO.

Netsmart, owned by GI Partners and Allscripts, bought HealthMEDX in October 2016. Terms weren’t disclosed.

Meanwhile, McBee Associates, a $7 million-in-EBITDA consulting firm serving home-health providers and hospital systems, is working with boutique advisory firm TripleTree to explore a sale, Buyouts recently reported.

Requests for comment were not immediately returned on Tuesday by representatives of Kinnser, Insight, Georgian and William Blair.

Action Item: Contact Insight Managing Director Peter Sobiloff at +1 212-230-9213 or ps@insightpartners.com

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