U.S. Renal Fails To Find Buyer, Pays $137.5 Mln Dividend to Sponsors (Including Cressey & Co.)

U.S. Renal Care, which is backed by several sponsors including Cressey & Co., failed to find a buyer earlier this year and is now paying a dividend to its shareholders, four sources say.

Plano, Texas-based U.S. Renal Care, which provides outpatient dialysis services, was up for sale during the spring, three people say. U.S. Renal was looking to sell for multiples that were “pretty lofty,” one source says.

The company was looking for bids in the 8-9x range and the market was offering 6-7x, the source says. One banker says U.S. Renal received lots of offers but decided to pass.

“The sponsors weren’t willing to buy on the growth they were showing so they pulled the auction,” the first person says.

Goldman Sachs advised on the U.S. Renal Care sale, a different banker says.

Instead of selling, U.S. Renal will be paying out a $137.50 million dividend to its sponsors, peHUB has confirmed. RBC Capital Markets is currently in the market for a $255 million loan for U.S. Renal Care that will be used to refinance debt and pay the $137.5 million dividend to its sponsors, according to Standard & Poor’s LCD.

U.S. Renal provides dialysis services to patients that suffer from chronic kidney failure. The company has 86 outpatient facilities in 11 states. U.S. Renal recognized about $271 million in revenue for the 12 months ended March 31, according to Moody’s Investors Service.

Founded in 2000, U.S. Renal lists several sponsors as its financial partners. In 2005, SV Life Sciences led a $30 million financing for the company that included Salix Ventures and Select Capital Ventures. Cressey & Co. came on board in July 2006 when the PE firm was known was Thoma Cressey Equity Partners.

U.S Renal, at that time, completed the subscription of $36 million in Series C preferred stock and added Thoma Cressey to its list of financial partners (Note: Thoma Cressey split up in 2007 into two firms: Thoma Bravo and Cressey & Co.).

Cressey & Co. and U.S. Renal Care could not be reached for comment.