APP – BBH Recap

APP – BBH Recap

Company Overview

A leading provider of comprehensive management and staffing services to emergency department and hospitalist programs throughout the U.S.

Brown Brothers Harriman (BBH) is a privately owned and managed financial services firm.

Situational Overview

Since being formed in 2015, APP has been one of the fastest growing companies in the industry.

APP garnered the attention of many private equity groups; however, management believed it was too early to consider even a partial sale and would only evaluate offers that fully valued its newly signed contracts and its rapidly growing pipeline of new opportunities.

Brown Brothers Harriman Capital Partners (“BBH”), had recently participated unsuccessfully in an auction process for a similar business to APP. BBH remained keenly interested in the sector and approached BCA about the prospects for an investment.

BCA Strategy

BCA worked with BBH to develop a proposal that would satisfy management’s concerns regarding not receiving adequate value for its highly visible near-term growth prospects.

BCA performed comprehensive analysis to quantify and justify a number of add-backs and their impact to pro-forma EBITDA.

In addition, BCA developed a mechanism that enabled APP to receive full value for the EBITDA of a target being acquired at a lower multiple and future contracts that would be signed within 90 days post-closing.

Transaction Result

BCA played a critical role in the comprehensive diligence process and helping document an extremely complex transaction.

Shareholders received significant liquidity at closing and additional consideration based upon signing new contracts 90-day post-closing.

This innovative pro forma transaction structure allowed APP to receive full value in December 2016 for 2017’s results while still maintaining 50%+ ownership.

Recapitalized by

“Brentwood Capital played a critical role in structuring, negotiating and closing a transaction that exceeded our shareholders’ expectations for value, liquidity and for strategic opportunity going forward. They are trusted advisors whose expertise and commitment to success were key factors in successfully closing this transaction.”
- John Rutledge, CEO
American Physician Partners