- Company expected to miss 2017 financial projections
- Medicaid-dependent provider has NY concentration
- Home health on the block: Oak Hill’s AccentCare, Palladium’s Jordan Health
The sales process for Premier Home Health Care Services has been withdrawn amid expectations that the home-health company was poised to miss its 2017 earnings projections, four sources said.
Premier, which provides primarily non-medical senior home-care services, had tapped JP Morgan Securities to run an auction, Buyouts reported in June.
The White Plains, New York, company at the time projected 2017 adjusted EBITDA of about $55 million on revenue of $430 million, sources said at the time.
While Premier had hoped to fetch a multiple of EBITDA upward of 9x to 10x, first-rounds bids from about five parties were submitted at just 7x to 8x, two of the sources said.
Led by Co-Founder and CEO Arthur Schwabe, Premier was also faced with a limited buyer universe.
Besides high price expectations, pure-play strategic buyers often don’t want to focus on New York for various reasons, including the fact that it represents one of the most expensive health-insurance markets in the country, sources said.
A slow organic-growth profile and large reliance on Medicaid reimbursement were also cited as challenges in the process. Medicaid-dependent providers continue to be viewed as among the most at-risk to potential changes to Obamacare.
Succession was another factor, as Schwabe, who founded Premier in 1992, no longer wished to stay with the company, sources said.
Among those that participated in the process were PE-backed strategic platforms including Blue Wolf Capital Partners’ National Home Health Care and One Equity Partners’ All Metro Health Care, while publicly traded Almost Family was also understood to have been in the mix, sources said.
With Premier off the table, eyes are likely to shift to other home-care providers including Oak Hill Capital Partners’ AccentCare Inc. JP Morgan is also running the auction for the Dallas provider, with Harris Williams co-advising, Buyouts reported in August.
Besides sponsors, AccentCare could also field strategic bids from healthcare payors that are poking around the space, one source noted. The company, which is approaching EBITDA in the $70 million range this year, is expected to command an EBITDA multiple in the 9x to 11x range, sources have said.
Also returning to the market, for a third time, is Palladium Equity Partners-backed Jordan Health Services, which Buyouts reported in August had tapped Houlihan Lokey for a sale.
Premier, for its part, offers geriatric-care management services, non-medical home-health aid, live-in and overnight caregiving services, companion services, at-home skilled nursing, hospice care, in-home respite care and in-home rehabilitation services.
One differentiating element at Premier is its managed-care business. The unit provides population health management services such as utilization review, care-management and risk-assessment services to help manage costs for dual-eligible and Medicaid health-plan members
Representatives of Blue Wolf, OEP and JP Morgan declined to comment. Those with Premier and Almost Family didn’t immediately return requests for comment.
Action Item: More about Premier Home Health: www.premierhomehealthcare.com/
Photo courtesy of Eva-Katalin/E+/gettyimages