Kinderhook Gets Big Multiple on Stratus Exit
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Kinderhook Gets Big Multiple on Stratus Exit

Kinderhook Industries has agreed to sell Stratus Video to publicly traded AMN Healthcare Services for $475 million. The valuation multiple for this transaction appears later in this article.

Clearwater, Florida-based Stratus Video is a provider of video remote interpretation, over-the-phone interpretation and in-person interpretation services used in the healthcare industry. The company has a network of 3,000 on-shore and off-shore interpreters and more than 1,600 customers including health systems, acute care hospitals, community health centers, federally qualified health centers, ambulatory surgery centers, and post-acute and home health providers.

Kinderhook acquired Stratus (then CSDVRS, LLC) in February 2015 from M/C Partners, Providence Equity Partners and Communication Service for the Deaf.

During its ownership term, Kinderhook closed two add-on acquisitions with the buys of InDemand Interpreting, a Seattle-based provider of video and audio interpretation services, in May 2019; and Optimal Phone Interpreters, a Winter Park, Florida-based provider of over-the-phone interpretation and document translation services, in January 2016.

Through year-end 2019, Stratus Video had TTM revenues of $119 million and TTM adjusted EBITDA of $34 million. Based on a $475 million purchase price, this equates to a 14x adjusted EBITDA purchase price multiple.

“Our investment in Stratus highlights the key tenets of Kinderhook’s investment strategy – partnering with world-class management teams to aggressively grow businesses in niche markets both organically and through acquisition,” said Chris Michalik, a managing director at Kinderhook. “This is a great outcome for Kinderhook, Stratus and its employees and we are very proud of the accomplishments of Stratus’ team, led by David Fetterolf and Maureen Huber, and we expect the company to continue to flourish as part of AMN Healthcare.

AMN Healthcare (NYSE: AMN) provides travel-nurse staffing services and outsourced recruitment and placement of interim and permanent executive leadership, physicians and dentists. The company has revenues of more than $2 billion and is headquartered in San Diego.

New York City-based Kinderhook makes control investments in companies with transaction values of $25 million to $150 million in which the firm can achieve financial, operational and growth improvements. The firm makes investments in non-core divisions of public companies, management buyouts of entrepreneurial-owned businesses, troubled situations, and existing small-capitalization companies lacking institutional support.

Last month, Kinderhook held a final closing of its sixth private equity investment fund, Kinderhook Capital Fund VI LP (along with a parallel fund, together “Fund VI”), at its hard cap with $1 billion of limited partner commitments. The new fund was oversubscribed and is the largest fund ever raised by Kinderhook.

Evercore was the financial advisor to Stratus Video and J.P. Morgan advised AMN.

The buy of Stratus Video by AMN is expected to close in early March 2020.

© 2020 Private Equity Professional | February 3, 2020

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