Webster shelves BayMark auction, eyes further growth

Webster Equity Partners pulled opioid-treatment behemoth BayMark Health Services from the market, people familiar with the situation told PE Hub.

A Goldman Sachs-run auction was recently called off after bids failed to meet price expectations, two sources said.

Webster, of Waltham, Massachusetts, initially tapped Goldman about a year ago and formally kicked off a tightly run sales process in the fall, PE Hub reported.

The private equity-only auction was hoping to produce a deal valued at $1 billion-plus, sources previously said.

BayMark, of Lewisville, Texas, is expected to test the market again in a few years after achieving further growth and after Ebitda surpasses the $100 million mark, one of the sources said.

BayMark anticipated actual 2019 Ebitda of $75 million and adjusted mature Ebitda of $95 million, PE Hub wrote in September.

Webster’s investment in BayMark dates to June 2015, when the healthcare- and consumer-focused private equity firm purchased BAART Programs. BAART combined with MedMark Services in October 2015, creating BayMark.

Led by CEO Dave White and Chairman Jerry Rhodes, BayMark over the last four-and-a-half years has expanded to become North America’s largest provider and consolidator of opioid treatment services, surpassing publicly-traded Acadia Healthcare.

The company has grown via both organic and M&A efforts. Notable acquisitions include its March 2018 deal for Canadian Addiction Treatment Centers, through which BayMark inherited a network of clinics in Ontario, and its November 2018 purchase of SpecialCare Hospital Management, of St. Louis.

BayMark centers offer medication-assisted treatment for opioid addiction, using methadone and buprenorphine along with counseling and support services.

Other PE-backed players in the sector sought buyers in 2019, including Revelstoke Capital’s Crossroads Treatment Centers, which enlisted Harris Williams and Cain Brothers to evaluate a sale.

Elsewhere, Housatonic Partners turned to Piper Jaffray to advise on a potential sale of Aegis Treatment Centers.

Neither Crossroads nor Aegis have traded hands.

Webster backs other behavioral health companies, including Discovery Practice Management, an eating-disorder-treatment platform that does business as Center for Discovery. It is also an investor in InBloom Autism Services, a provider of applied behavior analysis services to children with autism spectrum disorder.

Webster Capital and BayMark’s White declined to comment. Goldman Sachs didn’t immediately return a request for comment.

Action Item: Check out Webster’s latest Form ADV: https://www.adviserinfo.sec.gov/Firm/156729