Buyer: Court Square Capital Partners
Seller: National Seating Mobilty- Wellspring Capital Management
Sector: Mobility, HME
National Seating & Mobility has had a banner year, with a slew of acquisitions and the launch of its home accessibility business, which is why it might be the perfect time to sell.
National Seating & Mobility entered into a definitive purchase agreement with Court Square Capital Partners, a New York-based private equity firm. Court Square Capital Partners will buy NSM from Wellspring Capital Management, also a New York-based private equity firm, which bought the company in 2012.
“Sometimes it makes sense to flip to another firm, especially if you’ve owned it for awhile and it’s grown nicely,” said Jonathan Sadock, managing partner with Paragon Ventures. “Most private equity firms will return anywhere from three to four times invested capital during their hold period. That’s pretty substantial, especially if it’s a three-year term.”
Under Wellspring’s ownership, NSM has added 35 branches organically and rolled up dozens of providers, most recently the complex rehab division of Webb Medical Systems in February.
Financial terms of the deal, which is expected to be completed within 60 days, were not disclosed, but NSM is rumored to be worth $400 million.
“(Wellspring) has done very well, so now it’s gotten to a point where they’re going to take advantage of the trajectory they’ve built into another transaction,” said Sadock. While NSM has had a “very positive experience” with Wellspring, the company is looking forward to its new partnership with Court Square, says CEO Bill Mixon. “They have a great track record of partnering with businesses and helping them be successful,” he said.
Court Square currently manages approximately $6 billion in capital commitments and has engaged in more than 200 transactions. While the firm has focused on healthcare acquisitions over the last 35 years, NSM is its first HME-specific acquisition.
“It is certainly going to be a benefit (to NSM), just based on the sheer size of the transaction and the volume that (Court Square) is managing going forward,” said Sadock. “I would think they’re probably going to plan to double or triple the size of this business.”