Anne Arundel Dermatology halts sale in second round, sources say

15 May 2020 - 01:47 pm UTC

by Claire Rychlewski in Chicago, Dane Hamilton in New York and Deborah Balshem in Ft. Lauderdale

Anne Arundel Dermatology (ADM), the private equity-backed chain of Mid-Atlantic dermatology practices, was exploring a sale in the run-up to the coronavirus pandemic that it has since put on hold, according to three sources familiar with the matter.


The auction of the Severna Park, Maryland-based company was in the second round when it was halted, said each of the sources. ADM had narrowed down the bidder pool to a handful of bidders, they said.


Last July, this news service reported that ADM retained Coker Capital Advisors to run a sale process. At the time, the process had not yet launched. ADM generates approximately USD 20m of EBITDA, as reported.


ADM, which bills itself as the largest provider of dermatology services in Maryland, is majority owned by New MainStream CapitalPantheon Ventures is a minority stakeholder in the business.


Non-essential healthcare providers like dermatology practices have been facing a sharp fall in patient visits due to COVID-19 restrictions. Elective procedures have largely been delayed until the worst of the pandemic passes.


The situation has forced many pending healthcare sale processes to be put on hold, particularly in physician services, as the companies work to recoup losses. 


This dynamic has also created substantial uncertainty around valuations, said one of the sources, emphasizing that it remains unclear how and to what extent normal business operations will resume. 


For its part, ADM has been able to maintain some of its business through telemedicine and emergency appointments, said another of the sources.


New Mainstream invested an undisclosed amount in ADM in 2015. Three years later, it sold a minority stake to Pantheon in a recapitalization. Coker Capital advised ADM on the transaction, while Greenberg Traurig provided legal counsel. 


ADM provides services across 59 locations in Maryland, Virginia and Tennessee, providing general dermatology, skin cancer treatment and cosmetic procedures.


ADM, Coker and New MainStream did not respond to requests for comment.