Scoop: Carousel's Palmetto Infusion readies sale

Carousel Capital is gearing up for a sale of Palmetto Infusion Services, sources familiar with the matter tell Axios.

Driving the news: Raymond James is engaged to advise on the sale of the provider of infusion treatment services. A process is expected to formally launch later this month, sources say.

• The Southeast-centric company is marketing adjusted EBITDA of around $40 million, sources say, adding that a mid-teens multiple is anticipated.

Details: Palmetto Infusion, based in Pawleys Island, S.C., provides ambulatory- and home-based infusion services to patients living with complex chronic and acute diseases.

• The company encompasses 30-plus locations across North Carolina, South Carolina, Georgia and Alabama.
• Charlotte, N.C.-based Carousel recapitalized Palmetto in April 2019.

State of play: Like other specialties, payors and providers are waking up to the fact that ambulatory and home infusion therapy is both a more convenient and cost-effective setting of care. (Versus, historically, inpatient or outpatient hospital care, for example.)

• Ambulatory clinics, in particular, offer labor efficiencies as clinical staff can care for more patients at one time.
• The large pipeline of biologics and therapeutics dependent on infusion services — in concert with soaring pharmaceutical costs — adds to demand to drive down costs.

Yes, and: If recent history is any indication, Palmetto ought to draw strong investor interest. Recent bets in the category include:

• InTandem Capital Partners in March launched Denver-based Vivo Infusion via simultaneous investments in AIC businesses MPP Infusion Centers and ID Consultants.
• Oak HC/FT in November led a $50 million funding into Infusion for Health, a Southern California-centric AIC platform.
• In September, Great Hill injected a $100 million growth investment into IVX Health, an AIC network also backed by Linden Structured Capital, McKesson Ventures, Health Velocity Capital, and Nueterra Capital.
• Waud Capital in August bought PromptCare, which comprises an in-home infusion therapy business and complex respiratory business.

What they're saying: Tailwinds driving the vertical's shift to ambulatory and home-based settings offer a greenfield opportunity to create new quality standards and consumer-driven models, but the category is still young.

• "In as little as three years, over 50% of infusion authorizations from payor initiated site-of-care reviews will be directed to the AIC segment," Intandem's Brad Coppens told Axios in March.
• “The fact that the [ambulatory infusion] market is so nascent and fairly unsophisticated is driving savvy investors to say there’s a first-mover advantage to secure,” Infusion for Health CEO told Sarah in November. “A lot of centers are growing not because they’re doing it right, but because there are no good alternatives.”

Carousel and Palmetto did not return requests for comment, while Raymond James declined to comment.