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PSA Healthcare is up for sale, seeks bids of at least $200 mln

Portfolio Logic, the Washington D.C. investment firm from Jeffrey Zients, has put PSA Healthcare up for sale, five sources said.

BMO Capital Markets is advising, the people said. PSA, of Norcross, Ga., provides pediatric home care services for medically fragile children, according to the firm’s website. The company also offers in-home options for adults with medically fragile conditions. PSA employs more than 4,100 caregivers.

The company produces $20 million in EBITDA and is seeking double digit bids, two of the sources, who are bankers, said. Private equity firms have dominated the auction, according to three of the sources.

The status of the auction is unclear. J.H. Whitney & Co. is in exclusive talks to buy PSA, four of the sources said. However, those discussions have broken down, two of the people, a banker and a private equity source, said, while others say that is wrong. Epic Health Services, which also provides pediatric skilled nursing, placed a bid for PSA but lost, sources said. Epic is a portfolio company of Webster Capital.

Portfolio Logic acquired PSA in August 2007. D3 Family Funds, which had been PSA’s largest stakeholder, became a minority investor with the sale, a statement said. At the time of the sale to Portfolio Logic, Zients was managing partner of the investment firm. President Obama picked Zients in October 2013 to salvage the Obamacare website. Zients is currently Director of the National Economic Council and Assistant to the President for Economic Policy, his White House bio said. Zients has placed Portfolio Logic assets in a blind trust, one banker said.

Ziets, while in the Obama administration, has had no active involvement in Portfolio Logic or any of the companies in which it invests, a White House official said in an emailed response to questions.

Executives for PSA declined comment. Portfolio Logic, D3 Family Funds and J.H. Whitney could not be reached for comment.

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