HOPCo taps Houlihan to explore sale, sources say

Breaking News 12 September

HOPCo taps Houlihan to explore sale, sources say

Healthcare Outcomes Performance Co. (HOPCo), a doctor management group focused on musculoskeletal and orthopedic care, has appointed Houlihan Lokey to explore a sale, according to multiple sources familiar with the matter.   

HOPCo, which is jointly held by Linden Capital and Audax Private Equity, generates between USD 80m and USD 90m in EBITDA, four of the sources said. The company is currently considering “strategic options,” and has not decided on when it may launch a sale process, said two of the sources.   

Phoenix-based HOPCo bills itself as the nation’s largest value-based musculoskeletal (MSK) and orthopedic practice group, providing care through a network of over 850 MSK specialists on a per-member, per-month basis. The company works with orthopedic doctor groups, hospitals, ambulatory surgical centers and others in states such as Arizona, Michigan, Florida and Nevada.  

Linden and Audax made an undisclosed investment into HOPCo in 2019 and backed the company to expand via acquisitions of MSK and orthopedic practices, according to Mergermarket’s database. HOPCo in 2020 also acquired Stryker’s [NYSE:SYK] Performance Solutions business, a software platform to enhance operational performance, for an undisclosed amount.   

A sale of HOPCo would come amid active sale processes for other similar management services organizations (MSOs), which buy or partner with doctor groups and provide administrative, financial, accounting, information technology and myriad other services to these groups.   

OrthoAlliance, for instance, backed by Revelstoke Capital, is in advanced stages of a sale process, also via Houlihan Lokey, generating around USD 60m of EBITDA, this news service reported on 15 August. In addition, US Orthopaedic Partners, backed by FFL Partners with around USD 60m of adjusted EBITDA, is in the early stages of a sale process via Harris Williams, this news service reported on 15 August.  

A third group, U.S. Foot & Ankle Specialists, a podiatrist group owned by NMS Capital, is in the early stages of a sale process via Raymond James, this news service reported in August.   

Representatives of HOPCo, Houlihan and Audax declined to comment. Linden did not respond to requests for comment.

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