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Sequoia-backed SCIO Health seeks adviser for another auction

  • Broad process likely to launch in November or December
  • Company generates EBITDA in $12 mln-$20 mln range
  • William Blair advised on previous auction

Sequoia Capital-backed SCIO Health Analytics is expected to return to the auction block in the coming months, three sources said.

The West Hartford, Connecticut, health-analytics firm is in the midst of discussions with investment banks regarding a potential sales process, they said.

SCIO Health hopes to propel its about $12 million in EBITDA to $20 million in 2018, one of the sources said.

The company a few years back tapped William Blair to advise on an auction, but the process ultimately did not produce a deal, according to two of the sources, as well as a separate source.

While the latest process for SCIO encompassed primarily strategics, one of the sources said a broader process is expected this time. Once a banker is selected, a formal process is likely to launch around the November-December time frame, this source said.

High customer concentration was an issue in the previous process, two of the sources said, noting that the risk is perceived to have decreased.

SCIO provides predictive analytics services to insurers, providers, and health-service and life-science companies. It collects and interprets data for companies, which it then uses to make recommendations that will drive down costs and improve patient outcomes.

CEO Siva Namasivayam founded SCIO in 2007, after leaving IT-services firm MphasiS following its $750 million sale to Electronic Data Systems.

Sequoia partnered with SCIO that same year. The company’s investor group also includes New York PE firm Health Enterprise Partners and India-focused VC Saama Capital II.

SCIO’s associated investment adviser at Sequoia is Shailendra Singh, a managing director based in the firm’s Bengaluru, India, office.

Spokespeople for Sequoia and William Blair declined to comment, while those with SCIO didn’t immediately return requests for comment.

Action Item: Sequoia’s portfolio: www.sequoiacap.com/companies/

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