As anticipated, Webster Equity Partners this week launched its sale process for Bristol Hospice as investors continue to deploy capital in the growing end-of-life care industry, according to sources familiar with the process.
Goldman Sachs and Houlihan Lokey are providing sell-side financial advice on the process, the people familiar said.
PE Hub originally wrote in January that an unknown advisor had been retained to run an upcoming process for the Salt Lake City, Utah, company.
Sources placed Bristol’s EBITDA around 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 that time, PE Hub wrote that the Waltham, Massachusetts, private equity firm had scooped up Bristol at an 8x multiple of Bristol’s projected $9 million in LTM EBITDA for 2017 – equating to an enterprise value of $72 million.
Although the process just kicked off, recent trades in the hospice care segment have commanded mid-teens EBITDA multiples.
Notably, HIG Capital in October prevailed in the sale process for Vistria Group’s St. Croix Hospice. The deal valued the Oakdale, Minnesota, company at $580 million – representing at a mid-teens EBITDA multiple – sources told PE Hub 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.
Bristol represents one of the last remaining independent hospice platforms of scale available for investment after Care Hospice and St. Croix Hospice recently traded hands.
Formed in 2006, Bristol is now 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.
Hospice care, generally speaking, has proven a strong and consistent performer 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.
Further, the industry 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.
Webster, meanwhile, also has a dual asset continuation fund currently in market, with Goldman and Rothschild advising on the process, PE Hub wrote last month.
The firm is exploring a secondaries continuation vehicle for two existing Fund III portfolio companies: BayMark, an opioid-treatment company, and Pharmalogic, a specialty nuclear pharmacy business.
Webster, Goldman and Houlihan declined to comment. The company could not immediately be reached.