Bain Capital Expands its Pediatric Home Health Platform

In less than a month, Bain Capital Private Equity has built a major pediatric home health care platform.

It began on December 19,  2016, with Bain’s announcement that it was acquiring Dallas, Texas-based Epic Health Services, from Webster Capital. On January 17, 2017, the global private equity firm announced a deal for Atlanta, Georgia-based PSA Healthcare, sold by J.H. Whitney Capital Partners. Financial terms were not disclosed in either deal.

J.H. Whitney acquired PSA Healthcare, then known as Pediatric Services of America, Inc., in March 2015, for an undisclosed price. PSA specialized in caring for medically fragile children at home, caring for more than 2,500 patients through 65 offices in 17 states.

Since that acquisition, PSA announced three acquisitions of its own, all in 2016. In February, it announced a deal for Care Unlimited Inc., a Pittsburgh-based pediatric home care firm licensed to provide services in 28 western and central Pennsylvania counties. In September came the announced acquisition of Professional Pediatric Home Care, a portfolio company of Bow Capital Partners, based in Centennial, Colorado.  Two months later, the company purchased two more pediatric home health companies, Innovations Health Services of Tyler, Texas and Assure Home Healthcare of San Antonio, Texas.

Epic Health Services has grown faster and much larger, since it was acquired by Webster Capital in 2010. (See chart below.) Webster went shopping, and beginning in 2012, the add-on deals started rolling in, eventually totaling 16 transactions.

In April 2016, Webster Capital hired Goldman Sachs & Co. to explore the sale of Epic Health, which is when Bain Capital came into the picture.

Once the two pediatric home health platforms are merged successfully, look for Bain to start shopping the combined company to the likes of HealthSouth (NYSE: HLS), which took on Encompass Home Health and Hospice from private equity firm Cressey & Co. in November 2014 for $750 million. Or even Kindred Healthcare (NYSE: KND), which announced it was leaving the skilled nursing market in order to concentrate on long-term acute-care hospitals (LTACs) and other post-acute services. You never know.