Bristol Hospice Sale Moves Into Second Round of Bids

The sale of Bristol Hospice by private equity backers Webster Equity Partners is moving into the second face of the acquisition process. The remaining bidders are all private equity firms, with strategic buyers stepping out of the process after the first round, which took place last week, PE Hub reported. Bids are reportedly reaching as high as $1 billion.

Bristol is one of the last private equity-backed hospice companies of scale that is likely to come to market in the near future. The company is a large multi-regional player that has grown seven times larger since Webster purchased the company in 2017. The hospice operates 35 locations across 10 states, and its EBITDA exceeds $70 million, according to PE Hub.

By all appearances, Bristol will ultimately go to one of several competing PE firms.

“Although strategics were previously in the mix, none — including PE backed platforms — will move forward in the next stage of the process,” according to PE Hub. “First round bids were fielded last week, which a mid single-digit number of private equity firms remain in the running for the Salt Lake City company.”

Private equity hospice transactions rose nearly 25% between 2011 to 2020, according to a recent industry transaction report that M&A advisory firm The Braff Group shared with Hospice News. Investor interest in hospice continues to grow despite record-high valuations in the space. High price tags on hospice companies have not scared away buyers, even as multiples in the space reached as high as 26x during 2020.

A Bristol deal could rival the purchase of St. Croix Hospice in October by the private equity firm H.I.G. Capital for an undisclosed sum. Minnesota-headquartered St. Croix, previously owned by the investment firm the Vistria Group, has a large Midwestern footprint that extends across six states and has completed a number of acquisitions of its own during 2019 and 2020, as well as adding five de novos last year and one so far in 2021.

Bristol itself has been very active in the M&A market. The company completed nine acquisitions during 2020 and 14 in total since Webster purchased the agency.

Among its 2020 transactions were the purchases of Remita Health in September, Sojourn Hospice & Palliative Care in March and the hospice operations of Visiting Nurse Association of the Inland Counties (VNA). Financial terms for these transactions were undisclosed.

Bristol also purchased the California operations of Companion Hospice for a confidential sum, filling a gap in its geographic service area. Companion retained its Texas and Arizona locations.

Bristol will likely find its buyer during this second round of bids.

“The second round is to refine the offers from the first round,” Andre Ulloa, principal with Team M&A at American Healthcare Capital, told Hospice News. “Typically, you’ll land on your buyer at the conclusion of the second round.”