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KKR-backed BrightSpring Health to revive IPO plans

Sep 25, 2023
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Illustration: Sarah Grillo/Axios

KKR-backed home health provider BrightSpring Health Services, which withdrew its IPO plan last year, confidentially refiled to raise $1 billion, Bloomberg reports.

Why it matters: Publicly traded home health companies saw their stocks take a beating last year, and notable players Amedysis and LHC struck strategic deals, so this was not anticipated.

What's happening: The listing is slated for the fourth quarter, Bloomberg reports, citing people familiar with the situation.

  • Louisville, Kentucky-based BrightSpring re-engaged Goldman Sachs and KKR's capital markets division as lead bookrunners for the offering.
  • Other banks on the deal include UBS, Leerink Partners, Guggenheim Securities, Bank of America, Wells Fargo, Mizuho Financial Group, Deutsche Bank and William Blair.

Catch up fast: KKR acquired BrightSpring from Onex Partners in 2019 and merged it with PharMerica, in a deal valuing the combined business at a reported $1.3 billion.

  • In a statement at the time, KKR said that the merged company had a combined revenue of about $4.5 billion.
  • Terms were not disclosed but KKR reportedly paid about 9.5x EBITDA to buy BrightSpring (fka ResCare).
  • In February 2021, BrightSpring acquired home health and hospice provider Abode Healthcare for about $750 million, or reportedly about 16x EBITDA.
  • BrightSpring subsequently filed for an IPO in October 2021, but as the public market continued its downward trajectory, the company pulled plans in November.

By the numbers: Per the company's 2021 S1, BrightSpring had revenue of $5.6 billion at that time, with adjusted EBITDA of about $412 million.

Between the lines: A sunnier reimbursement landscape for home health could partly be driving BrightSpring’s move to the public markets.

  • CMS’ final home health payment rule increases Medicare payments this year by 0.7%, or $125 million, compared to 2022.

KKR declined to comment.

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