Sheridan backs TarryTown ExpoCare in $160 mln deal

The deal for the IDD-focused pharmacy concludes a GuideCap Partners-run sales process.

Sheridan Capital’s investment in TarryTown ExpoCare assigns the specialty long-term pharmacy business an enterprise value of $160 million, two sources familiar with the matter told PE Hub.

Chicago-based Sheridan announced Tuesday that it had invested in TarryTown, a founder-run pharmacy that caters to individuals with intellectual and developmental disabilities.

TarryTown’s management team, including Founder and CEO Mark Newberry, retained a stake in the business, the announcement said.

TarryTown’s Ebitda lies at approximately $14 million, implying the $160 million transaction was valued just south of 12x, one of the sources said.

The deal concludes a sales process conducted by boutique M&A firm GuideCap Partners. Oxford Finance provided debt financing for the transaction.

Sheridan’s winning bid topped other parties in the auction whose offers were valued within the $100 million to $120 million range, another source told PE Hub. Other funds bidding included those with behavioral health portfolio companies or an alternative strategic angle, this person said.

Founded in 2013, TarryTown, of Austin, Texas, provides prescription medication to patients with intellectual and developmental disabilities. The company primarily delivers services to patients residing in group homes, serving more than 1,900 locations today.

With the bulk of TarryTown’s revenue stemming from Texas, approximately 95 percent of the company’s services are reimbursed by Medicare and Medicaid, one of the people noted.

TarryTown joins Sheridan’s existing healthcare portfolio, which includes Atlantic Vision Partners, Canadian Orthodontic Partners, Dermatologists of Central States, Empower Physical Therapy, Oral Surgery Partners and SpendMend.

Sheridan invests exclusively within the healthcare industry, targeting founder-owned and entrepreneurial led businesses. The firm typically invests in platforms with Ebitda in the $3 million to $15 million range, making equity investments of $15 million to $50 million.

Sheridan’s Sean Dempsey, Jonathan Lewis, Alexander Kain and Stephen Lestyan led the TarryTown transaction.

Sheridan and TarryTown’s Newberry declined to comment.

Check out Sheridan’s latest Form ADV: https://bit.ly/2SXFMu1