Webster Equity’s Bristol Hospice preps sale process

The upcoming process for Bristol comes as Webster runs a secondaries process for two existing Fund III portfolio companies: BayMark and Pharmalogic.

Webster Equity Partners will soon bring Bristol Hospice to market, according to sources familiar with the firm’s plans. 

Bristol, based in Salt Lake City, Utah, is among the last remaining independent hospice platforms of scale available for investment – after Care Hospice and St Croix Hospice agreed to trade hands around mid-teens EBITDA multiples last October. 

Sources placed Bristol’s EBITDA in the mid- to high-$70 million range, which implies the company has grown more than seven-fold since Webster’s initial investment in November 2017. 

At the time, PE Hub wrote that the Waltham, Massachusetts, private equity firm had scooped up Bristol at an 8x multiple based off its projected $9 million in LTM EBITDA for 2017 – implying an enterprise value of about $72 million.

Formed in 2006, Bristol is a multi-regional end-of-life care provider, with programs that provide hospice services to meet the physical, psychosocial and spiritual needs of its patients and their families or caregivers. 

PE Hub could not confirm if a sell-side financial advisor had been engaged, but Webster has tended to work with Goldman Sachs on the sell-side in the past. Goldman advised Webster on the sale of Epic Health Services to Bain Capital in 2017 and the aborted process on Baymark Health Services in 2019. 

Goldman also is advising Webster alongside Rothschild on a dual-asset continuation fund, PE Hub has learned. Webster, as previously reported by sister title Buyouts, is exploring a secondaries vehicle for two existing Fund III portfolio companies: BayMark, an opioid-treatment company, and Pharmalogic, a specialty nuclear pharmacy business.

Bristol’s anticipated sale process comes as hospice care businesses have proven strong and consistent performers through the pandemic.

On the reimbursement front there’s no overhang, while hospice care is also considered cost-efficient for the health system, offering care outside of the hospital, which is one of healthcare’s most expensive settings of care.

The industry also remains largely local and fragmented, meaning platforms still have immense runway for M&A and growth. The professionalizing of the industry and a value proposition that appeals to both fee-for-service and managed care models of reimbursement is helping drive that consolidation, sources said.

In recent notable activity, HIG Capital prevailed in the sale process for Vistria Group’s St Croix Hospice. The deal valued the Oakdale, Minnesota-based company at $580 million – representing a mid-teens EBITDA multiple – sources told PE Hub in October upon its signing. 

Around the same time, Boston’s Thomas H Lee Partners agreed to buy Care Hospice, while existing investor Martis Capital stayed on as a minority owner. The transaction ultimately commanded an EBITDA multiple of about 15x, suggesting a deal valued in the ballpark of $750 million, based upon the approximately $50 million in EBITDA that sponsors looked to underwrite the business, sources said. 

Webster declined to comment.