PE Tenex Capital is reportedly looking for a buyer for Team Select Home Care


Private equity fund Tenex Capital is reportedly seeking a buyer for Team Select Home Care, a home care service provider that serves the medically complex pediatric population as part of its business model.

Tenex began accepting offers on Team Select in a process that began about a month ago, according to Axios. Financials for the process include “approximately $35 million pro forma adjusted EBITDA, out of approximately $250 million in revenue,” according to Axios sources.

The two aspects of Team Select’s business model that make it relatively unique are its aforementioned commitment to pediatric patients and its involvement in the paid family caregiver model.

The latter is growing in popularity, both due to regulatory changes at the state level and private interest. For example, there is Arizona’s “Family Licensed Health Aide Program”, which allows parents, relatives and other family members to become paid caregivers. Aveanna Healthcare Holdings (Nasdaq: AVAH) participates in this program by training and paying family caregivers.

In addition to Arizona, four other states participate in the Family CNA program: Colorado, Indiana, New Hampshire and Pennsylvania.

Aveanna also happens to be one of the largest providers of pediatric home care in the country, although it changed its business to cater more to the needs of the elderly population after entering the public market.

Elsewhere, two major private equity firms – DW Healthcare Partners and Linden Capital Partners – have recently invested in public partnerships (PPL) enabling self-managed home care. At the end of September, the special acquisition company (SPAC) DTRT Health Acquisition Corp. also merged with Consumer Direct Holdings, a self-managed home personal care network.

Although self-managed care is not exactly the same as the Family CNA program, the concepts are very similar. The thought process behind the models is that paid family caregivers help these people, while keeping patients out of more expensive institutional settings.

“The state wins by doing this because they can pay us 30% to 50% less per hour for us to staff a CNA versus an LPN or RN,” the President and CEO said. from Team Select, Fred Johnson, to Home Health Care News in late 2020. “Any state that implements this program will see significant savings on every dollar and hour worked.”

For its part, Phoenix-based Team Select provides home care — including Medicare-certified home health care — as well as senior living services in 11 states. Its Family CNA program is the company’s fastest growing line of business, according to Axios.

“In the pediatric field, it’s usually a much lower margin business, but it’s usually long-term in nature when it comes to medically fragile children,” Johnson said. “A lot of these kids don’t really have a prognosis for getting better. What we can do is keep them comfortable and provide them with an excellent quality of life by providing good care at home so they don’t live out their days in and out of hospitals, care facilities skilled nurses (SNF) and other care centres.

Tenex invests in middle market companies across all industries. He originally backed Team Select in October 2017.

In healthcare specifically, he has also invested in durable medical equipment company Compass Health Brands, Smile Design Dentistry and life sciences company Black Diamond Networks. She recently made her investments in travel nurse recruitment company Medical Solutions and medical equipment company Ohio Medical Corporation.

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