Q3 2015: Spotlight on Dynamic Pediatric-Youth-Collegiate Healthcare

1

© 2015 Lincoln International LLC Lincoln International

Medical: Hospital to Outpatient

NICU / PICU Pediatric PPM Pediatric Urgent

Care Pediatric Dental Pediatric Specialties

Medical: Home Health & Community Based Care

Pediatric Home

Health

Pediatric Therapy Specialty Needs / At-

Risk Youth PPEC

RT/HME/IV/Pharmacy

Behavioral: Residential to Outpatient

Mental Health

Youth / Collegiate Substance Abuse

Eating Disorder Special Needs / ID-

DD Early Intervention /

ABA / Autism

Lincoln International’s Healthcare Group is pleased to present

observations and perspectives on recent transactional activities and

sector dynamics in the arenas of medically complex pediatric

healthcare, youth through collegiate-focused behavioral health

services and other special needs care provided to young people.

Medical and behavioral healthcare for this age group (aged 0-23)

requires unique and specialized expertise and experience by

providers and other medical-healthcare entities. The demographic

numbers (e.g., 14 million U.S. youths have a behavioral health

issue; 2 million children have multiple chronic diseases and are

medically complex) and the uniqueness of this patient population

(kids are not young adults when it comes to the type of care

provided) make this broader market an interesting investment

arena. Relevant themes include:

Lower-cost home and community based care;

Recurring, long-term chronic care services & management

Improved patient outcomes

Enhanced intellectual and physical growth;

Significant legislative, regulatory, parental and societal support

for services;

Recurring, long-term service aspects;

Powerful value proposition for early intervention; and

Tremendous overall societal benefits

Q3 2015: Spotlight on Dynamic Pediatric-Youth-Collegiate Healthcare

Lincoln International Healthcare Group professionals advised on the these related transactions:

Pediatric-Youth-Collegiate (PYC) Provider Service Spectrum

have sold

and its Pediatric Division to

a portfo lio company of

has refinanced

has been sold to


have sold

to


has acquired

2


Amino acid / carbo metabolism

Bone & joint anomalies

Brain/spinal cord malformations

Cardiomyopathies

Chromosomal anomalies

Chronic liver disease/cirrhosis

Chronic renal failure

CNS degeneration & disease

Cystic fibrosis

Epilepsy

Heart malformations

Hered i ta ry anemia and

immunodeficiency

Human immunodeficiency virus

Infantile cerebral palsy

Inflammatory bowel disease

Lipid metabolism

Muscular dystrophies

Respiratory malformations

Sickle cell disease

D E A L R E A D E R Healthcare Third Quarter 2015

Depression

Bipolar disorder

Psychosis

Substance abuse

Dual diagnosis

Eating disorders

Intellectual development

Mental retardation

Example Pediatric Chronic Medical Conditions Example PYC Behavioral Disorders (Among Most Common)

Core Pediatric / Youth Medical and Behavioral Industry Themes

Unique patient populations (kids, not small adults)

Substantial skilled home health and alternate site care

needs

More “protected” population segment

SCHIP legislation and Accountable Care

Less competition / more fragmentation; few pure-play

providers

Multiple chronic and complex medical conditions

Unique specialization at provider level

Significant parent demand for care, service & products

Strong recurring, long-term revenue aspects

Potential for continuum of care given multiple, ongoing

medical and social needs

Multiple Medicaid and managed care / other payer programs

Home / outpatient: clinically effective and lowest cost forms

of long-term care

Powerful value proposition: Positive impact on society,

family, individual and long-term productivity and skills

Sample Medical Care Providers Active in Pediatric Space

Sample Behavioral Therapy Providers Active in PYC Space

Company Ownership Significantly Pediatric Diverse

Accurate Home Care Generation Equity Bayada Private Care Options for Kids Ancor Capital Caregiver Services Psilos Group Cranial Technologies Cortec Group Encompass Home HealthSouth Epic Health Services Webster Capital Interim Healthcare Halifax Group Jordan Health Palladium Equity Maxim Healthcare Private Pediatria MidMark Capital Pediatric HealthChoice Clearview Capital PSA Healthcare JH Whitney

Company Ownership Significantly PYC Diverse

AdvoServ GI Partners Community Behavioral Bregal Partners Community Intervention Services

H.I.G. Growth

Cumberland Therapy Shore Capital Discovery Practice

Management Webster Capital

Eating Recovery Lee Equity Innerchange Cressey Monte Nido Centre Partners Pacific Child & Family Great Point Pyramid Healthcare Clearview Capital Summit Behavioral Flexpoint Ford Sunny Days Private Walden Behavioral Private

3


Sample Pediatric-to-Collegiate Alternate Site Healthcare Deals

M&A Themes and Activity

The table to the right measures the recent investment and M&A activity and interest by a variety of pediatric and youth/adolescent segments and provides our picture of where transactional activity will continue to be focused. Additional color points include:

We have seen a ramp-up in pediatric home health and

related deals since 2014, with platform deals doubling since 2012. Since mid-2014, we cite such deals as Loving Care’s sale to Epic Health, PSA Healthcare to J.H. Whitney and Accurate Home to Generation Growth.

M&A in youth and adolescent behavioral is even stronger,

with a number of investments having been made in such arenas as eating disorders, autism, early intervention and intellectual development, with treatment of substance abuse disorders in youths and college students not far behind.

A myriad of pediatric medical care segments, particularly in

outpatient and community based settings are also receiving good attention. Such segments include PPEC (prescribed

pediatric extended care), pediatric dental services, and pediatric-focused therapy categories.


Sources: Capital IQ, Company announcements, MergerMarket

Home Health PPEC

Most Activity/Interest

Eating Disorder Autism / ABA Specialized Education ID-DD/Special Needs

Dental Therapy Urgent Care Specialties Care Management

Active Early Intervention Substance Abuse Intensive Mental Health Other Addictions

PPM Custom Mobility

RT/Vents/HME/IV

Less Active

Pediatric Medical PYC Behavioral

Date Target Acquirer

Mid 2015 Futures Therapy Community Intervention Autism / ABA

Mid 2015 The Ranch at Dove Tree Summit Behavioral Healthcare, LLC Collegiate Substance Abuse

Early 2015 Diabeter Medtronic plc Pediatric DM/Outpatient

Early 2015 PSA Healthcare J.H. Whitney & Co., LLC Pediatric Home Health

Early 2015 Clarity Service Group, LLC Epic Health Services, Inc. Pediatric Therapy / Special Needs

Early 2015 Exceptional Home Care Jordan Health Services Pediatric Home Health

Early 2015 Loving Care Agency, Inc. Epic Health Services, Inc. Pediatric Home Health

Late 2014 Nurses to Go, LLC Epic Health Services, Inc. Pediatric Home Health

Late 2014 McCallum Place Eating Disorder Centers Acadia Healthcare Company, Inc. Eating Disorder

Mid 2014 Home Health Services of Texas, Inc. National Nursing & Rehab Pediatric Home Health

Mid 2014 Accurate Home Health Generation Growth Pediatric Home Health

Mid 2014 Blueballoon Health Services, Inc. Morneau Shepell Inc. (TSX:MSI) Pediatric Therapy

Mid 2014 Cumberland Therapy Services, Inc. Shore Capital Partners Pediatric Therapy / Special Needs

Early 2014 PM Pediatrics Management Group LLC Scopia Capital Management Pediatric Urgent Care

Late 2013 Collage Pediatric Therapy Morneau Shepell Inc. (TSX:MSI) Pediatric Therapy

Late 2013 Oliver-Pyatt Centers Monte Nido & Affiliates, LLC Eating Disorder

Late 2013 Autism Intervention Specialists, LLC Pacific Child & Family Associates, LLC Pediatric Therapy

Mid 2013 U.S. Community Behavioral Bregal Investments Inc. Behavioral

Early 2013 The Children's Secret Garden Child Health Holdings PPEC

Early 2013 Pediatric Radiology of America Aris Teleradiology Pediatric Radiology

Early 2013 Family Behavioral Resources South Bay Mental Health Center Behavioral

Early 2013 Kids Care Dental Group Sterling Partners Dental

Early 2013 Access Family Services South Bay Mental Health Center Behavioral

Late 2012 Sante Pediatric Epic Health Services Pediatric Therapy

Mid 2012 Urgent Care for Kids HealthCap Partners Pediatric Urgent Care

Mid 2012 South Bay Mental Health Center H.I.G. Growth Partners Behavioral

Mid 2012 Hesley North Bowmark Capital Special Needs / Autism

Early 2012 Progressus Therapy Sterling Partners Pediatric Therapy

Late 2011 Cranial Technologies Cortec Group Plagiocephaly Therapy

Late 2011 InnerChange Cressey & Company Behavioral

Mid 2011 Autism Services North Pacific Child & Family Associates Special Needs / Autism

Mid 2011 Youth and Family Services Acadia Healthcare Behavioral

Mid 2011 Children's Learning Connection Pacific Child & Family Associates Special Needs / Autism

Mid 2011 Pediatric Health Choice Clearview Capital PPEC

Mid 2011 Discovery Practice Management Webster Capital Eating Disorder

Early 2011 Camelot Schools The Riverside Company Special Needs / Autism

Early 2011 PyraMed Health Epic MedStaff Skilled Home Nursing

Primary Classification

4



Healthcare Group Officers

Lincoln International

Lincoln International specializes in merger and acquisition advisory services, debt advisory services, private capital raising and restructuring advice on mid-market transactions. Lincoln International also provides fairness opinions, valuations and pension advisory services on a wide range of transaction sizes. With 16 offices in the Americas, Asia and Europe, Lincoln International has strong local knowledge and contacts in key global economies. The firm provides clients with senior-level attention, in-depth industry expertise and integrated resources. By being focused and independent, Lincoln International serves its clients without conflicts of interest.

Healthcare Focus

Providers

Devices and Outsourcing

Diagnostics & Research Tools

Home Healthcare; Elder Health; Outpatient Services; Pharmacy Services

Device & Equipment; Products and Supplies; Medical Components; Contract Design/Manufacturing

Diagnostic Instruments; Diagnostic Devices; Research Equipment; Supplies & Consumables

Analytical Lab Services; Contract Research; Pharmaceutical Manufacturing; Medical Marketing

Pharmaceutical Services

Process Outsourcing

Hospital Outsourcing; Revenue Cycle Management; Employer Health Services; Information Technology Management

Ross Gordon Director

[email protected] +1-312-506-2772

Shahab Fatheazam Vice Chairman


Kai Ingo Seidel Managing Director (Healthcare Europe)

[email protected] +49-(0)-69-97-105-437

Michael Weber Managing Director


Selected 2014-2015 Lincoln Healthcare Transactions

Managed Care Health Plans; Third Party Administration; Benefits Management; Payor Outsourced Services

has been sold to

have sold

to

has sold

to

has been sold to


has sold

to

has sold

to

A portfo lio company of

has sold

to

A M S T E R D A M | B E I J I N G | C H I C A G O | F R A N K F U R T | L O N D O N | L O S A N G E L E S | M A D R I D

M I L A N | M O S C O W | M U M B A I | N E W Y O R K | P A R I S | S Ã O P A U L O | T O K Y O | V I E N N A | Z U R I C H

United States International

Jeff Carsello Vice President


Barry Freeman Co-Head, U.S. Healthcare


Gaurav Marathe Managing Director (India)


Tony Crisman Director


Phillip Knotts Vice President


Nick Konstantinou Co-Head, U.S. Healthcare


Keiji Miyakawa Managing Director, Chairman (Japan)

[email protected] +813-5549-7690

James Gilmore Director


has been sold to


has sold

to

has sold

to

has sold

to


Q3 2015: Spotlight on Dynamic Pediatric-Youth-Collegiate Healthcare

Documents

Transcript of Q3 2015: Spotlight on Dynamic Pediatric-Youth-Collegiate Healthcare