q3 2015: spotlight on dynamic pediatric-youth-collegiate healthcare
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© 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
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© 2015 Lincoln International LLC Lincoln International
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
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© 2015 Lincoln International LLC Lincoln International
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.
D E A L R E A D E R Healthcare Third Quarter 2015
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
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© 2015 Lincoln International LLC Lincoln International
D E A L R E A D E R Healthcare Third Quarter 2015
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
[email protected] +1-312-506-2770
Kai Ingo Seidel Managing Director (Healthcare Europe)
[email protected] +49-(0)-69-97-105-437
Michael Weber Managing Director
[email protected] +1-312-506-2763
Selected 2014-2015 Lincoln Healthcare Transactions
Managed Care Health Plans; Third Party Administration; Benefits Management; Payor Outsourced Services
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United States International
Jeff Carsello Vice President
[email protected] +1-312-506-2794
Barry Freeman Co-Head, U.S. Healthcare
[email protected] +1-312-506-2775
Gaurav Marathe Managing Director (India)
[email protected] +91-22-4067-0300
Tony Crisman Director
[email protected] +1-312-506-2771
Phillip Knotts Vice President
[email protected] +1-312-506-2759
Nick Konstantinou Co-Head, U.S. Healthcare
[email protected] +1-312-506-2706
Keiji Miyakawa Managing Director, Chairman (Japan)
[email protected] +813-5549-7690
James Gilmore Director
[email protected] +1-312-506-2713
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a portfo lio company of
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