Livingstone Advises Centers for Autism & Related Disorders
Livingstone is pleased to announce three successful sales for Centers for Autism & Related Disorders, LLC (“CARD” or the “Company”). With 130 centers across 13 states and approximately 2,500 employees and healthcare professionals supporting its over 3,500 patients, CARD is one of the largest autism therapy service providers in the U.S.
On June 11, 2023, CARD filed voluntary petitions for relief under Chapter 11 in the US Bankruptcy Court for the Southern District of Texas. At the time of filing, the Company had roughly $275 million in funded debt and faced various headwinds and effects from a sudden onset of the COVID-19 pandemic. Livingstone was retained to pursue a sale of the Debtors’ assets pursuant to §363 of the Bankruptcy Code.
Pantogran, LLC, led by CARD’s founder and former CEO, Dr. Doreen Grenpeesheh, has acquired the majority of the Company’s assets, including 112 centers across the U.S. as well as all intellectual property, including CARD’s clinical database (Skills® Global). New Story Schools, a portfolio company of Audax Group, acquired all assets and clinical operations in Virginia, including nine centers and three special education schools. Proud Moments ABA, a separate portfolio company of Audax Group, acquired select assets and clinical operations, including two centers in Nevada, one center in New Jersey, and three centers in New York.
“We are pleased to have reached an outcome that ensures our centers will stay open and our patients will continue to receive outstanding care,” said Jennifer Webster, Chief Executive Officer of CARD. “Both Dr. Granpeesheh and the teams at Proud Moments and New Story bring considerable expertise and track records of excellence in this space, and I am confident our patients are in good hands. I would also like to acknowledge the entire CARD team for their unwavering focus and steadfast commitment to our patients throughout this process.”
Livingstone Partner Joe Greenwood stated, “After an intense multi-day auction, marked by spirited bidding and complex negotiations, we are thrilled with the positive result for our client, its patients, and the Company’s other stakeholders. This challenging transaction, culminating in three successful sales, is a testament to our team’s resilience, commitment, and expertise.”
“Since the onset of the pandemic, the ABA industry has experienced various headwinds, including staffing shortages, wage inflation, and stagnant reimbursement rates. Though, with the growing prevalence – as many as 1 in 36 children have been identified with autism – demand far outstrips market challenges, and many market participants have successfully navigated the challenging environment,” commented Jim Moskal, Partner at Livingstone. “The attractive industry dynamics that drove buyer interest and valuations prior to the pandemic remain, and through our recent transaction experience, we have an in-depth understanding of the ABA market landscape, investor universe, and attributes that drive value,” he added.
The CARD transaction illustrates the multi-disciplinary service delivery that is the foundation of Livingstone, combining in-depth industry experience (Healthcare) and complex transactional expertise (Special Situations). This transaction furthers Livingstone’s extensive experience in the Behavioral Health sector, specifically in Autism / ABA therapy, which is one of the firm’s most active sub-sectors. Also, CARD bolsters the firm’s Special Situations practice, which has extensive experience advising middle-market companies through M&A, financing, and balance sheet restructuring transactions during periods of underperformance, distress, and insolvency.
Livingstone Partners served as financial advisor to CARD while Kirkland & Ellis served as legal counsel, and Portage Point Partners served as restructuring advisor, with Steven Shenker serving as Chief Restructuring Officer.
