Providence Service Corp retains JPM for sales process

  • LogistiCare is country’s largest manager of non-medical emergency transportation services
  • Company owns investment in Frazier-backed Matrix Medical
  • Sell-side adviser: JPM

Providence Service Corp, whose businesses range from medical transportation to in-home health assessments for seniors, has engaged JPMorgan to explore a sale, three sources told Buyouts.

Discussions with financial sponsors are in their early stages, sources said, noting that all options are on the table.

Reuters was first to report Providence (Nasdaq: PRSC) was weighing a sale. The news pushed the company’s share price up about 7 percent to $69.01 on Monday, Oct. 22, giving it a market capitalization of about $884 million, according to a Nasdaq report.

Providence Service’s largest business is LogistiCare, the country’s largest manager of non-emergency transportation programs for state governments and managed care organizations.

With operations in 39 states and Washington, D.C., it contracts with Medicaid agencies, managed-care organizations, accountable care organizations and healthcare providers.

LogistiCare in September bought Circulation, a startup enabling on-demand rides for patients.

Providence Service also owns a minority investment in Matrix Medical. Matrix, which is majority owned by Frazier Healthcare Partners, provides in-home health assessments tailored to seniors with Medicare Advantage, Medicaid and commercial health plans.

Frazier, a healthcare-focused PE firm, bought a 60 percent equity interest in Matrix in an October 2016 deal that valued the company at about $538 million. Providence initially bought Matrix from Welsh, Carson, Anderson & Stowe two years earlier for $400 million.

Matrix competes with New Mountain Capital’s Signify Health, which was formed in December 2017 through the joint acquisitions of CenseoHealth- and Summit Partners-backed Advance Health.

Both Matrix and Signify operate networks of doctors that visit seniors at home and collect data on their health. That data is ultimately used by private health plans to bill Medicare.

Providence Service via its Ingeus subsidiary encompasses government-sponsored programs throughout Europe, North America, Asia and Australia, offering various workforce-development services.

The Stamford, Connecticut, company posted about $818 million in revenue for the first six months of 2018, alongside segment-level adjusted Ebitda of about $45 million, according to its latest quarterly report.

Matrix during the first half of the year generated revenue and adjusted Ebitda of about $146 million and $30 million, respectively.

Representatives of Providence Service couldn’t immediately be reached, while a JPMorgan spokesperson declined to comment.

Action Item: Check out Providence Service’s latest quarterly report.