Boston-based Bain Capital has completed its acquisition of drug and alcohol treatment centre CRC Health Group, a former portfolio company of North Castle Partners. The firm acquired the company in a $720 million (€605 million) deal, which provided a more than 3x equity return for North Castle.
CRC operates more than 90 residential, outpatient and opiate facilities in 22 states throughout the US. The company, with headquarters in Cupertino, California, generated EBITDA of roughly $46 million last year on sales of $173 million.
Greenwich, Connecticut-based North Castle initially acquired the company in 2002, aligning itself with DLJ Merchant Banking for the investment. North Castle brought on more investors in the years following, including the Ontario Municipal Employees’ Retirement System and Northwestern Mutual Life Insurance Company.
Commenting on the investment, North Castle managing director Douglas Lehrman told PEO in October, when the deal was first announced, “There’s a tremendous social need for these facilities right now…We built CRC to provide services across the spectrum, geographically and on a socio-economic level.”
The company experienced substantial growth during North Castle’s ownership. When the firm first acquired the business, it was posting sales of around $40 million annually.
Bain Capital, meanwhile, has also been active in the healthcare space in the past. Previous deals in the sector include investments in medical-waste management outfit Stericycle, senior living facilities company Epoch and Duane Reade, a pharmacy retailer.
Debevoise & Plimpton provided legal counsel to the sellers, while JP Morgan and Merrill Lynch provided financial advice. CRC had initially pursued a dual path strategy, and had looked at the possibility of an IPO before deciding on the sale.
Law firm Ropes & Gray advised Bain.
North Castle also completed its sale of Equinox Fitness this month, selling the health club chain to The Related Companies in a $505 million deal.