Webster Capital, having reaped a handsome return on its recent sale of pediatric home-health company Epic Health, is shifting its attention to treatment for patients suffering life-limiting illnesses.
The Waltham, Massachusetts, private equity firm has signed a letter of intent to acquire Bristol Hospice, a subsidiary of closely held senior-care provider Avalon Health Care, Buyouts has learned.
The provider of hospice care is set to fetch around 8x its projected 2017 EBITDA of about $9 million, a person familiar with the matter said. That implies a valuation just north of $70 million.
The agreement, which has not yet closed, would conclude an Edge Healthcare Partners-run process for Bristol. Finalists in the auction included H.I.G. Capital, another sponsor and a PE-backed platform, Buyouts reported in June.
Led by CEO Charles H. Gonzales, Bristol through its subsidiaries provides various hospice services across California, Georgia, Hawaii, Oklahoma, Oregon, Texas and Utah.
Hospice programs include pain and symptom management, spiritual counseling, therapy, skilled nursing care, hospice aid, continuous care, outpatient services, general inpatient services, respite care services and durable medical equipment, among other things.
Services are reimbursed through Medicare Part A, Medicaid and third-party insurance, according to Bristol’s website.
Sources have described Bristol as a good business but one with complexities given that it operates under Avalon Health Care. Avalon operates numerous skilled nursing facilities and Bristol has a handful of joint ventures with other healthcare facilities that may need unwinding, one of the people noted.
Bristol is yet another example of consistent interest from the PE community in hospice-care providers.
Others currently on the market include Midwest-concentrated St. Croix Hospice. The Clearview Capital-backed operator, which sources have said is projecting EBITDA of $15 million-plus for 2017, is working with Cain Brothers and Triple Tree on a sales process.
The St. Croix process has garnered strong interest and is narrowed down to a handful of financial buyers, said one source.
Webster, for its part, produced an impressive outcome on its latest exit in healthcare services.
In selling Epic Health to Bain Capital, Webster was set to generate a return of more than 10 times its initial investment in the pediatric skilled-home-health company, a source familiar with the matter said at the time. The deal, which closed in March, traded for about about $950 million, or an EBITDA multiple of about 12x, the source said.
Representatives of Edge and H.I.G. did not immediately return requests for comment, while those at Avalon couldn’t be reached. A Webster representative declined to comment.
Action Item: For a full list of Webster’s current portfolio: http://www.webstercapital.com/portfolio.php
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