Centerbridge, CDPQ snag MedSol in ~$2.2bn deal, Ontario Teachers' values Acorn at ~$250m

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The Wire

Aug. 31, 2021

Behind Centerbridge and CDPQ's $2.2bn deal for MedSol; Ontario Teachers' validates growth of autism-treatment; Apax buys CI Capital's SavATree

Morning!

Big one: As demand for clinical workforce continues to outstrip supply at health systems nationwide, Centerbridge Partners and CDPQ teamed up to buy healthcare staffing firm Medical Solutions for an enterprise value of approximately $2.2 billion, according to people familiar with the deal terms. TPG Growth is the seller. Like many other healthcare processes over the last several months, the pandemic added complexity in valuing MedSol. MedSol marketed $240 million of 2021 EBITDA in the sale process, and sources said the Omaha, Nebraska-headquartered business is likely to exceed that number. That said, the buyer underwrote a more normalized EBITDA of around $200 million, the people said, accounting for the high rates and high volumes the nursing industry is witnessing today. When hospital utilization is booming that lends to growing demand for temporary nurse staffing, while also leading to inflation in day rates for nurses. Nonetheless, the supply-demand imbalance in nursing isn’t a new phenomenon, but one that... Read my full report on PE Hub.

Sector resurgence: The recent sale of MBF Healthcare Partners’ Acorn Health is proving another validator that the sub-sector remains an interesting pocket of healthcare investment for growth-focused financial buyers. Ontario Teachers’ Pension Plan Board, in its latest multi-site healthcare bet, acquired a majority stake in Acorn valued at approximately $250 million, four sources familiar with the deal terms told PE Hub. Its valuation speaks to both the company’s quality and growth opportunities sitting in front of the broader autism segment – fueled by the need for greater professionalization and standardization of care in what remains a fragmented and underserved industry, they said. For price multiples and more, check out my full story here.

Save a tree: Here’s an interesting deal in a niche but seemingly large market. Apax Funds has agreed to acquire SavATree, a professional tree, shrub and lawn care provider, from CI Capital Partners, the firms said Tuesday morning. For CI Capital, SavATree looks to be a winning investment. The company under its investment -- which dates to June 2017 -- has tripled its revenue. It has scaled from 28 branches in 12 states to 58 branches serving 27 states, fueled by a combination of organic growth and 27 add-on acquisitions.

That’s it! Have a great rest week ahead, and as always, write to me at [email protected] with any tips, feedback or just to say hello!

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Also of note (may require subscriptions)

Biggest ever: Clearlake Capital Group has returned to the market pitching what would be its largest flagship fund to date, little more than a year after wrapping up the fund’s predecessor. The firm is targeting $10 billion for Clearlake Capital Partners VII LP, people familiar with the fundraising effort told the Wall Street Journal. Read more on WSJ.