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Scoop: Tenex-backed Team Select seeks buyer

Oct 17, 2022
Illustration of a child surrounded by medical crosses receding into the distance

Illustration: Sarah Grillo/Axios

Tenex Capital is seeking a buyer for Team Select Home Care, a provider of diversified home care services, multiple sources tell Axios.

Why it matters: Team Select trading hands could trigger further investment around an innovative solution that aims to improve care for medically fragile children.

Driving the news: Tenex kicked off a PE-centric sale process for Team Select around a month ago via Cantor Fitzgerald, sources say, with initial bids earlier this month.

  • The process is marketing about $35 million of pro forma adjusted EBITDA, on about $250 million of revenue, sources say.

Context: Backed by Tenex in October 2017, Team Select provides services that range from Medicare home health to senior living services, across 11 states in the southwestern and central U.S.

  • The Family CNA Program is its fastest-growing arm.

Between the lines: Five states offer a Family CNA Program today — Arizona, Colorado, Indiana, New Hampshire and Pennsylvania — but there's a big push to implement similar legislation in other states like New Jersey and Texas.

Zoom in: There's growing recognition that such programs address two major problems.

  • The dearth of caregivers certified to care for medically fragile children contributes to financial and emotional stress as parents are forced to leave their jobs.
  • High medical costs associated with re-hospitalizations, as medically fragile children in the home receive only 2% of Medicaid spending, per a 2019 Health Affairs study.

Yes, and: The program is a job creation opportunity for families in need, not unlike self-directed home care, which is also gaining traction. (Recall recent activity around Public Partnerships and Consumer Direct Holdings.)

State of play: In addition to Team Select, PE-backed pediatric home care companies that play in this CNA program include:

  • Varsity Healthcare's April 2019 investment in Angels of Care, though most of the company is straight Medicaid home care.
  • Flexpoint Capital Partners' March 2020 investment in MGA Homecare, which is a mix of private duty nursing, the Family CNA program, and in-home therapy.
  • Aveanna, the publicly traded diversified home care giant.

Tenex and Team Select did not return requests for comment, while Cantor declined to comment.

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