Scoop: Avista Capital seeks buyer for National Spine & Pain

A sale process has kicked off for Avista Capital Partners' National Spine & Pain Centers, sources tell Axios.

Why it matters: Traditional back surgery and other procedures tend to be invasive and expensive, and outcomes are mixed. NSPC, the largest player in the growing interventional pain arena, offers an alternative technique.

• Its pain specialists provide more cost-effective minimally invasive treatment.
• This technique can also reduce the usage of medications, helping address the opioid problem, with one source noting NSPC has shown a reduction in usage by 30%.

What’s happening: Indications of interest for the Rockville, Maryland-based business are due later this month, sources say.

• Moelis is lead adviser to the sellers in the sponsor-focused process, while RBC Capital Markets is co-advising.
• The company is marketing EBITDA in the mid-$50 million range, and sources say a low double-digit or low teens multiple is likely.
• NSPC has more than 120 affiliated locations spanning 13 states, with 1,200-plus health professionals facilitating more than a million visits each year.

State of play: The interventional pain management market remains highly fragmented, indicating a large white space opportunity for continued consolidation.

• Growth-oriented private equity firms have built out M&A platforms in other physician practice management verticals, ranging from physical therapy to oncology, and NSPC could be viewed through a similar lens.
• Competing PE-backed platforms include NexPhase Capital’s Clearway Pain Solutions Institute.

Between the lines: Chronic pain is a common issue, increasing in prevalence as the population ages, and that should fuel increasing demand for interventional pain management.

• The 2019 edition of National Health Interview Survey showed that 50.2 million adults (20.5%) reported pain on most days or every day, with more than 1 in 5 adults in America experiencing chronic pain.
• Per IASP, lower back pain is the leading cause of global disability.

Catch up quick: Avista in September 2020 merged NSPC with Prospira PainCare, a portfolio company of Enhanced Healthcare Partners and Webster Equity Partners, creating the largest platform in the category.

• Avista became majority owner of the combined business, with Enhanced and Webster retaining minority interests.
• Avista’s original investment dates to June 2017, when it bought the company from Sentinel Capital Partners.

Avista, Moelis and Webster declined to comment. NSPC, RBC and Enhanced did not return requests for comment.