Scoop: Pritzker Private Capital readies KabaFusion sale

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.

• "Demand remains substantial," Masood told Specialty Pharmacy Continuum a year into the pandemic.

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.