CCMP Capital is reportedly preparing to sell Eating Recovery Center (ERC), according to PE Hub. Citing people familiar with the plans, the publication reported that the private equity firm is looking to begin the process later this year.
CCMP Capital focuses on leveraged buyout and growth capital transactions. It currently has about 4.7 billion in assets unders its management.
Meanwhile, ERC is one of the nation’s largest eating disorder treatment providers. It has about 30 locations serving patients with eating disorders across eight states, with treatment options ranging from inpatient services to intensive outpatient programming (IOP) and virtual care. ERC also has a mood and anxiety treatment business called Pathlight.
CCMP Capital first invested in ERC back in 2017, purchasing the provider for a reported $580 million. Back then, the company had a pro forma adjusted EBITDA of about $45 million, sources told PE Hub. These days, though, ERC boasts an EBITDA of about $65 million, suggesting that it could yield an EBITDA multiple between 15x to 20x, the publication reported.
Prior to 2017, Lee Equity Partners owned ERC, having purchased the company back in 2013.
Considering the high — and growing — demand for eating disorder treatment services, as well as the fact that ERC is covered by most major commercial payers, the provider stands to be an attractive acquisition target for any buyer hoping to enter or deepen its presence in the space.
The sale rumors come at a time when private equity interest in behavioral health is especially high. In fact, dealmakers predict PE players could help behavioral M&A reach a new peak in 2021.
On top of that, two other PE giants are also reportedly weighing behavioral health sales of their own. The Carlyle Group is rumored to be considering a sale of its teen rehab Newport Academy, while Welsh, Carson, Anderson & Stowe could be looking to sell its 30-facility behavioral health network SpringStone, according to PE Hub.
BHB reached out to CCMP Capital and ERC for this story. Both parties declined to comment.
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