Axios Pro Exclusive Content

Scoop: Pritzker Private Capital readies KabaFusion sale

May 27, 2022
Illustration of a saline bag solution with money as the liquid in the bag.

Illustration: Aïda Amer/Axios

Pritzker Private Capital is gearing up for a sale of KabaFusion, multiple sources tell Axios.

Why it matters: KabaFusion is a leader in and one of the only remaining independent home infusion platforms of scale focused on intravenous immunoglobulin (IVIG).

  • IVIG is used to treat a number of autoimmune disorders, idiopathic diseases and infections.

Details: KabaFusion produces approximately $50 million of EBITDA, has good margins and strong top-line growth, sources say.

  • It operates 22 fully accredited home infusion specialty pharmacies, with service capabilities in 40-plus states, making it one of the largest privately held home infusion companies.
  • In addition to IVIG, KabaFusion offers subcutaneous immune globulin (SCIG) and acute home-infusion IV therapies.
  • The timing of the process is not yet clear.

Catch up fast: In 2019, Pritzker bought KabaFusion in a deal valued at approximately $250 million, representing a mid-teens EBITDA multiple, some of the sources say.

  • Houlihan Lokey advised KabaFusion last time around and the sellers are said to have hired the bank again for this sale, but that has not been confirmed.
  • In 2020, KabaFusion acquired Lincare's line of infusion pharmacies, adding about $100 million in revenue, two sources say.
  • KabaFusion, with headquarters in Cerritos, California, and Lexington, Massachusetts, was founded in 2010 by CEO Sohail Masood, who is considered a pioneer in the infusion market for IVIG.

State of play: There are two large consolidators in home infusion, but after that, there's a big drop-off and a highly fragmented market. That suggests an opportunity to create another leading platform and consolidator, potentially via KabaFusion.

  • The big two are OptumRx, which in 2015 bought AxelaCare, a home infusion company specializing in IVIG, from Harvest Partners, and Option Care Health (Nasdaq: OPCH), whose stock, in contrast to many health care companies, is up on the year.
  • In the private markets, IVIG is one of the biggest therapies for H.I.G. Capital's Soleo Health.

Reality check: Option Care in April posted another strong quarter but cited supply chain challenges and product shortages in immune globulin (IG) therapies (where KabaFusion plays).

  • Tightened plasma donations amid COVID disruption have only added to supply concerns over the last two years.

Yes, but: KabaFusion's Masood said in a trade publication in April 2021 that it had not witnessed any supply chain issues despite anticipated shortages, adding that any suppressed demand for IG products had not been felt.

What they're saying: KabaFusion should get strong interest from pure-play sponsors, sources say, but it could also draw some looks from PE-backed strategic buyers like Waud Capital's PromptCare or One Equity Partners' InfuCare Rx.

Pritzker and Houlihan Lokey did not return requests for comment.

Go deeper