Welsh, Carson, Anderson & Stowe is approaching a full or partial sale of InnovAge that could produce a deal valued in the ballpark of $900 million, according to sources with knowledge of the process.
Final bids are due early next week for InnovAge, the country’s largest provider of the Program of All-inclusive Care for the Elderly – an alternative to nursing programs, the people said.
The process formally kicked off several months ago, with most diligence completed before covid-19-fueled market uncertainty in mid-March. The process was temporarily put on hold at that point, sources said.
Centerview Partners and Guggenheim Partners are providing financial advice on the process, they said.
InnovAge, headquartered in Denver, Colorado, expects to produce 2020 EBITDA in the $60 million to $70 million range, according to sources.
The auction has narrowed to three financial sponsors and one strategic, the people said. Clayton, Dubilier & Rice, Apax Partners and Centerbridge Partners are in the running, some of the sources said. The strategic buyer is believed to be Unitedhealthcare Group’s Optum unit, two sources said.
Should the process produce a sponsor outcome, WCAS intends to retain a stake of around 50 percent, one of the people said.
WCAS’s investment in the company dates to May 2016. As part of the $196 million deal, InnovAge converted its non-profit status into a for-profit entity.
The company is a unique opportunity for investment as it remains the only for-profit PACE company today.
InnovAge offers PACE in Colorado, California, New Mexico, Pennsylvania and Virginia, with the goal of helping individuals live independently for as long as possible. The company coordinates and provides seniors with customized healthcare, in-home care and social services and support, as well as affordable housing in certain markets.
The company has an all-female leadership team, led by CEO Maureen Hewitt. Its approximately 2,000 employees serve nearly 6,000 seniors, according to its website.
WCAS, Centerbridge, Centerview and Guggenheim didn’t return requests for comment. Optum, CD&R and Apax declined to comment. The company couldn’t be reached.
Action Item: Read about WCAS’s recently formed primary care JV with Humana.