Webster’s BayMark buys Canada Addiction Treatment Centers

  • Ontario provider generated ~$13 mln adjusted ’17 Ebitda
  • BMO offered sell-side advice
  • BayMark takes No. 1 spot in opioid-treatment industry

Webster Capital-backed BayMark Health Services purchased one of the largest networks of opioid-treatment clinics north of the border, Buyouts has learned.

BayMark, Lewisville, Texas, acquired Canadian Addiction Treatment Centers, which operates 70-plus clinic locations throughout Ontario, 19 pharmacies and one residential facility, according to a source familiar with the matter.

Post-acquisition, Baymark will surpass publicly traded Acadia Healthcare as North America’s largest treatment company looking to tackle the opioid-abuse epidemic. The deal brings BayMark’s number of locations to just under 170 in Ontario and 26 states.

CATC generated $13 million adjusted Ebitda in 2017, according to two sources. The price multiple pans to about 10x Ebitda before synergies, or closer to 8x post-synergies, one source said.

CATC, of Markham, Ontario, received financial advice from BMO Capital Markets on the transaction, one of the sources added.

For BayMark, the purchase comes on the heels of its January deal for Healthcare Resource Centers, through which it added 15 facilities in the northeastern U.S.

BayMark rapidly emerged as a consolidator of outpatient opioid-treatment centers after Webster formed the platform about 2 1/2 years ago. The Waltham, Massachusetts, PE firm bought BAART Programs in June 2015 and MedMark Services in October 2015, combining the two to create BayMark.

At BayMark, the model extends beyond methadone treatment to buprenorphine-focused treatment clinics and ambulatory detox sites.

Industry veterans Dave White and Jerry Rhodes serve as CEO and chairman of BayMark, respectively.

Other PE-backed opioid-treatment groups include Linden Capital PartnersPinnacle Treatment Centers, Revelstoke Capital PartnersCrossroads and Housatonic PartnersAegis Treatment Centers.

Webster is also an investor in Discovery Practice Management, an eating-disorder-treatment platform that does business as Center for Discovery. Webster’s investment in the Los Alamitos, California, group dates to 2011.

The firm retained Cain Brothers in early 2016 to consider a sale of Center for Discovery, Buyouts reported, though ultimately opted to hold off on launching a process.

Webster’s newest platform investment in healthcare is Bristol Hospice, which it scooped up in a deal valued just north of $70 million, or about 8x Ebitda, in November. The firm prevailed over two other finalists in the Edge Healthcare Partners-run auction, Buyouts reported.

Action Item: Check out the rest of Webster’s portfolio here: http://www.webstercapital.com/portfolio.php

Gail Dufault, transitional healthcare coordinator at Barnstable County House of Corrections, checks that a dose of Vivitrol is mixed properly before administering the drug to inmate Kenneth Saglibene at the prison in Buzzards Bay, Massachusetts, on Sept. 2, 2014. REUTERS/Brian Snyder