Supplemental Health Care, backed by Vistria, weighs sale

The rapid growth seen by the provider of healthcare staffing is likely to create difficulty in valuing Supplemental as sponsors assess how the business and market will look in a post-covid world.

Vistria Group is mulling a sale of Supplemental Health Care, which staffs healthcare providers in settings ranging from the classroom and home to clinics and correctional facilities, five sources familiar with the matter told PE Hub

In response to inbound interest, a narrow process involving limited conversations with sponsors is underway, some of the people said. Marketing materials were sent out about a month ago, one of the people added. 

Evercore is providing sell-side financial advice, sources said. 

Supplemental generated approximately $15 million in 2020 EBITDA and is projecting $50 million in adjusted EBITDA for 2021, three of the people said.

This growth through the pandemic, as witnessed across the broader healthcare staffing industry, is likely to create difficulty in valuing the company as potential sponsors assess how the business, and the market’s supply-demand imbalance, will look in the post-covid world, sources said. 

Because Supplemental is in hyper growth-mode, one of the people cautioned that Vistria may choose not to sell now, with the timing likely to come down to value. 

Based in Park City, Utah, Supplemental connects travel nurses with employment in hospitals, health systems, schools, correctional facilities, allied healthcare and therapy, behavioral health, and the home setting. More than 50 percent of the company’s staffing positions are not tailored to the acute care market, but across those other settings – a mix that certain buyers find attractive, one person said. 

The company states on its website that it fills more than 10,000 healthcare roles every year. It also operates offers managed service provider programs, which are generally viewed as providing some protection from the economic cyclicality of the staffing market. 

Led by CEO Greg Palmer, Supplemental under Vistria has also brought in new management members to propel its strategy. That includes the March 2020 appointment of a new COO, Vickie Anenberg, the former president of CCS, Cross Country Health Care’s nurse and allied division, as well as the October 2020 appointment of CFO Klaus Geiser, who held former leadership roles at companies including Adecco Group.

Vistria, a Chicago-based private equity firm, invested in Supplemental in February 2016.

Elsewhere in healthcare staffing, PE Hub wrote in January that TPG Growth had engaged Goldman Sachs and Evercore to advise on an upcoming sale process for Medical Solutions, a much larger travel nurse staffing company that has also seen tremendous growth through the pandemic. That process formally kicked off earlier this month, sources recently told PE Hub. 

In other recent activity, Cornell Capital and Trilantic North America have been building out a travel nurse and healthcare staffing platform, starting with the joint acquisitions of trustaff and CardioSolution in early February. The pair of firms subsequently bought Fastaff Travel Nursing and US Nursing from Thomas H Lee Partners, the latter which remained invested in the combined company. 

Vistria and Evercore declined to comment, while the company could not immediately be reached.