- Revelstoke investment dates to January 2015
- Financial advisers: Harris Williams, Cain Brothers
- Other opioid-treatment players in the market: Housatonic’s Aegis
Revelstoke Capital Partners has kicked off its sales process for Crossroads Treatment Centers, according to two sources familiar with the matter.
The Denver PE firm expects to field first round bids later this month for the network of opioid-treatment clinics, the sources said.
Buyouts reported in January that Harris Williams was enlisted to run a sales process for the Greenville, South Carolina, company. While a process was initially expected to formally kick off in February, sources previously said, books were only distributed earlier this month.
Cain Brothers is co-advising, according to one of the sources.
Crossroads expects to produce approximately $25 million of pro-forma run-rate Ebitda through Q2, alongside approximately $87 million of revenue. While the process is in its early stages, sources suggested the provider ought to command a low- to mid- teen multiple of of Ebitda.
Founded in 2008 by CEO Rupert McCormac, Crossroads provides medication-assisted treatment for opiate addiction, using both methadone and suboxone. The group expects to offer services throughout 96 clinics across 10 states by year-end, according to one of the sources.
Revelstoke, a middle-market firm focused on healthcare and related business services, invested in Crossroads in January 2015. Crossroads in the period since has grown both via M&A and new clinic openings, while the company has also significantly expanded its third-party payer mix.
The auction for Crossroads comes as Housatonic Partners runs a sales process for California’s Aegis Treatment Centers. Piper Jaffray is advising on the process, Buyouts reported in March.
Meanwhile, industry giant BayMark Health Services, a portfolio company of Webster Capital, preps for its sales process. Goldman Sachs has been retained to advise on an auction poised to launch in the second half, Buyouts reported in January.
PE sponsors have proven eager to invest behind healthcare platforms looking to combat the nation’s worsening opioid-abuse problem. Other PE shops with investments in the space include Linden Capital Partners, while those that previously invested include Waud Capital Partners and Bain Capital.
In recent trades, Frontenac in December sold Behavioral Health Group to fellow Chicago PE shop Vistria Group. Terms weren’t disclosed, but the transaction was valued on the upper end of the $250 million to $300 million range, sources have told Buyouts.
Representatives of Revelstoke, Harris Williams and Cain Brothers didn’t immediately return requests for comment on Friday.
Action Item: Check out Revelstoke’s latest Form ADV: https://bit.ly/2USbE4w