Nightlight Pediatric Urgent Care to hire banker within 12 months to seek PE investment, CEO says

May 31, 2018

Provided by Mergermarket

Nightlight Pediatric Urgent Care, a Sugarland, Texas-based provider of after-hours urgent care for children, plans to seek a private equity partner within 12 months, according to CEO Zawadi Bryant.

The privately held company, owned by Bryant and two other individuals, will hire a banker to run a formal process. Nightlight is willing to sell up to a majority stake in the business, depending on the deal, the CEO noted.

Proceeds will support organic growth, geographic expansion and potential acquisitions, Bryant said. In addition to capital, an ideal investor will offer industry and operational expertise, strategic relationships, board support and human resource experience, she added.

Nightlight has seven locations throughout the greater Houston area, with an eighth set to open next month and 10 total centers expected by year’s end. The goal is to expand outside of Texas in roughly 24 months and to have at least 25 locations nationally within five years, Bryant said.

The company is projecting revenue of approximately USD 10.2m this year, compared to USD 8.5m in 2017 and USD 7.1m in 2016, according to the CEO. Its net profit margin is between 20% to 25%, she added. Nightlight is profitable but also re-investing into growth, with the capacity to reach an EBITDA margin of 15% to 20%, Bryant said.

Nightlight provides after-hours urgent care for infants, children and adolescents when primary-care physicians are unavailable. Its hours are 3pm to 11pm Monday through Friday and 11am to 9pm on weekends. Mature locations book approximately 14,000 to 16,000 visits per year. The self-pay rate is USD 150 for a visit, including all shots and X-rays.

The highly fragmented pediatric urgent care sector is “really hot,” according to Bryant, who explained that with a cooling off in the mainstream urgent care industry, specialty players – such as those focused on orthopedics, psychiatry and pediatrics – are gaining in popularity among investors.

EBITDA multiples for companies with fewer than 10 locations are roughly 3x to 5x, and from 7x to 9x for those with more than 10 centers, according to Bryant.

There are few pediatric-focused players and none with national presence, continued Bryant. The largest company is Scopia Capital Management-backed PM Pediatrics, which has approximately 31 locations mainly in New York and New Jersey, followed by Night Lite Pediatrics, with 12 locations in Florida. Striker Partners-backed Little Spurs Pediatric Urgent Care has 11 locations in Texas, while Urgent Care for Kids – backed by Kayne NewRoad Ventures, Dozier Capital Partners and HealthCap – has 10 locations in Texas.

Mergers among the larger players would make sense, Bryant said, when asked.

Nightlight was founded in 2007 by Bryant, 44, Chief Medical Officer Dr. Anastasia Gentles, 50, and Clinical Specialist Connie Cazares, 42. The three own 100% of the business, which has 130 employees and has grown organically to date via cash and bank debt.

The company recently launched telemedicine services as well as a membership program that allows users to pay a monthly subscription fee and receive a reduced visit fee.

Nighlight’s primary lender is Frost Bank. The company uses an individual attorney and accountant.

by Deborah Balshem in Fort Lauderdale


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