Thomas H. Lee Partners buys Centria in $400 mln-plus deal

The deal wraps up a competitive Moelis-run sales process for the Michigan provider of autism treatment services

Boston’s Thomas H. Lee Partners agreed to acquire Centria Healthcare in a deal assigning the autism-treatment provider a total enterprise value of approximately $415 million, PE Hub has learned.

The transaction provides an exit for existing shareholders Martis Capital and Lorient Capital (the former invested in the Novi, Michigan, provider about three years ago).

THL’s deal for Centria concludes a Moelis-run auction that kicked off in the summer, PE Hub previously reported.

A $415 million valuation implies Centria commanded a mid-teens Ebitda multiple, based upon a little more than $25 million in pro forma adjusted Ebitda for 2019, according to people familiar with the deal.

Founded in 2009, Centria provides home-based applied behavior analysis (ABA) therapy to treat autism, as well as pediatric nursing and catastrophic injury care.

Led by CEO Scott Barry, Centria is the largest provider of ABA treatment in Michigan.

Despite its Midwest roots, the company has expanded its services in recent years to Arizona, California, Indiana, Massachusetts, New Jersey, New Mexico, Oregon, Texas and Washington. Centria employs more than 3,500 full-time and part-time professionals.

Autism-treatment is a segment of the broader behavioral health industry that has seen an acceleration of private equity investment in recent years.

PE-backed platforms include Blackstone Group’s Center for Autism and Related Disorders, FFL Partners’ Autism Learning Partners, KKR’s Blue Sprig Pediatrics, Gryphon Investors’ LEARN Behavioral, Arsenal Capital Partners’ Hopebridge, Frazier Healthcare Partners’ Caravel Autism Health, among others.

In brewing activity, NexPhase Capital Partners put Texas autism-treatment company Action Behavior Centers up for sale, less than a year into its investment, PE Hub reported in September. Berkery Noyes is advising on the auction.

For THL, the deal follows other healthcare-related bets this year including its purchase of Francisco Partners’ Nextech. THL bought the provider of electronic medical record and practice management software in a deal valued north of $500 million, PE Hub reported in June.

In January, THL completed its investment in healthcare technology company Agiliti Health.

THL’s latest flagship fund, Fund VIII, raised $3.6 billion.

THL, Martis and Moelis declined to comment. Lorient and Centria’s Barry didn’t immediately return requests for comment Friday.

Action Item: See THL’s current healthcare portfolio: https://bit.ly/2PqQypk