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Scoop: Francisco Partners seek a buyer for Trellis Rx

Mar 22, 2022
Illustration of a pill with the dividing line in the shape of a dollar bill sign.

Illustration: Aïda Amer/Axios

Francisco Partners-backed Trellis Rx, a technology-enabled specialty pharmacy services provider for health systems, is exploring a sale, multiple sources tell Axios.

Why it matters: Hospitals need help facilitating pharmacy programs for complex, chronic patients.

  • Drug adherence is a big part of the health care equation, with specialty medications typically costly and challenging to manage. Trellis Rx’s personalized offerings focus on empowering patients to start and stay on therapy.
  • One source likens it to the revenue cycle function: “Hospitals are good at providing doctors; they’re not good at collecting bills. There are so many functions that hospitals need to outsource.”

What’s happening: TripleTree and Cantor Fitzgerald are advising on a potential sale of the business, sources say.

  • The Atlanta-headquartered company is marketing around $40 million of run-rate adjusted EBITDA, sources say. Value expectations are unclear.

Yes, and: Sources liken Trellis Rx to a smaller version of Shields Health Solutions, which is jointly owned by Walgreens Boots Alliance and Welsh, Carson, Anderson & Stowe.

  • Walgreens in September 2021 injected $970 million into Shields boosting its stake to 71%, with WCAS remaining a shareholder. The two parties originally partnered in mid-2019 to invest in Shields.
  • WBA's latest investment was said to be valued at around $2.5 billion, sources said previously, implying about a 25x-plus multiple of QoE EBITDA, or around 17x run-rate EBITDA, two sources said at the time.
  • The buzz around Shields’ investment activity was said to fuel more excitement and education around the pharmacy and 340B industries by other sponsors and buyers.

How it works: Trellis Rx partners with health systems to create or build out on-site specialty pharmacy programs.

  • Trellis Rx in January published data demonstrating that health systems with a fully integrated specialty pharmacy care model can improve clinical outcomes measures across various specialties.
  • In August, Inc. magazine reported that Trellis Rx had witnessed a three-year revenue growth rate of 5,947%.

The bottom line: “It should be a hot process,” one source says.

FP, Trellis Rx, TripleTree and Cantor didn't return requests for comment.

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