Banking & Finance  September 9, 2021

Mental health center’s owner to be sold

JOHNSTOWN — The owners of a behavioral health care facility in Johnstown and a second Colorado psychiatric hospital in Colorado Springs will be sold to a new private equity group, PE Hub reports.

Third new owner coming for Johnstown Heights Behavioral Health. BizWest file photo.

Franklin Tennessee-based Summit Behavioral Healthcare owns Johnstown Heights Behavioral Health in Johnstown and Clear View Behavioral Health in Colorado Springs. It paid $29 million for the building it opened the first in; a purchase price for Clear View couldn’t be found. The two total 204 beds.

Summit formed in 2013, sold to a private equity owner two years later, added a dozen or so locations in a roll-up of mental health facilities, attracted new majority private equity owners, added more sites, and is now with 24 facilities in 16 states and, at eight years old, being sold again.

It had been backed by Lee Equity Partners and FFL Partners. They will sell to Patient Square Capital.

Lee is in Chicago and FFL in San Francisco. Lee invests $50 million to $100 million range for majority stakes; FFL buys into companies worth up to $400 million. PE Hub, which reports on private equity mergers and acquisitions, said Summit’s 2021 EBITDA will be about $90 million.

PE Hub reported the deal assigned an enterprise value of $1.3 billion to Summit and the two sellers will each earn a 4x gross multiple on invested capital and a 42% gross individual rate of return.

Patient Square is in Menlo Park, California; it was formed in 2020 to invest in health-care products, services and technologies, its website said. Senior executives come from KKR, Ares Management and Golden Gate Capital.

In July it led a $100 million Series B round for gene therapy developer Kriya Therapeutics, in Redwood City, California, and Research Triangle Park, North Carolina. Kriya’s Series A was $80 million.

In June, Patient Square led a $145 million investment in Cambridge, U.K.-based Apollo Therapeutics, which has a U.S. base in Boston. The biopharmaceutical’s other investors include AstraZeneca, GlaxoSmithKline, and Johnson & Johnson.

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