Webster’s BayMark, opioid-treatment giant, launches sales process

BayMark Health Services, a PE-backed network of clinics looking to combat the nation’s opioid epidemic, has kicked off a sales process, according to people familiar with the matter.

BayMark Health Services, a PE-backed network of clinics looking to combat the nation’s opioid epidemic, has kicked off a sales process, according to people familiar with the matter.

Deal books were distributed earlier this week for the Webster Equity Partners-owned company, the people said. First round bids from potential buyers are due Oct. 18, they said.

Goldman Sachs is conducting the sales process for the Lewisville, Texas, opioid-addiction treatment company. Buyouts initially reported the adviser engagement in January.

The process will be tightly run and exclusively targeted at large buyout funds, one of the people said. Strategic buyers are excluded.

BayMark expects to produce actual 2019 Ebitda of $75 million and adjusted, mature Ebitda of $95 million, one of the people said. A $1 billion-plus valuation is anticipated, should a transaction occur.

Webster’s investment in BayMark dates to June 2015, when the Waltham, Massachusetts, 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 years has expanded to become North America’s largest provider and consolidator of opioid treatment services, surpassing publicly-traded Acadia Healthcare.

BayMark has grown through 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, whose centers span 28 states, offers medication-assisted treatment for opioid addiction, using methadone and buprenorphine along with counseling and support services.

The process for BayMark comes several months after smaller PE-backed peers including Crossroads Treatment Centers and Aegis Treatment Centers considered potential sales.

Revelstoke Capital enlisted Harris Williams and Cain Brothers to seek a buyer for Crossroads, while Housatonic Partners turned to Piper Jaffray to advise on a potential sale of Aegis.

While both have yet to trade hands, one that did recently clinch a deal is Behavioral Health Group.

Frontenac agreed to sell BHG to fellow Chicago private equity shop Vistria Group in December following a Piper Jaffray-run auction, Buyouts reported. Terms weren’t disclosed, but the transaction was valued at the upper end of the $250 million to $300 million range, sources previously said.

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 service to children with Autism Spectrum Disorder.

Webster Capital and Goldman Sachs declined to comment, while BayMark executives didn’t immediately return requests for comment.

Action Item: Check out Webster’s latest Form ADV: https://bit.ly/2nfEWLc