Paradigm mandates Harris Williams for sale process

This article is provided to FT.com readers by mergermarket—a news service focused on providing actionable, origination intelligence to M&A professionals. www.mergermarket.com
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Paradigm Management Services, the privately held provider of complex and catastrophic medical management in the workers’ compensation industry, has mandated Harris Williams for a sale of the company, three sources claiming knowledge told mergermarket. The sale process is still in the early stages, according to the first source.

The Walnut Creek, California-based company has USD 27m in EBITDA, said the first source. Current unemployment rates have dampened the multiples at which worker’s compensation companies trade, said an industry banker. A company like Paradigm, which he describes as growing well and having a unique model, could reasonably ask buyers to pay 8-9x EBITDA, he said.

In terms of potential acquirers, private equity firms or large managed care companies could be interested in the Northern California-based Paradigm, said the industry banker.

Paradigm, which was founded in 1991, is majority owned by Sterling Partners. On 28 June the company announced the hiring of a new CEO, Jim Hudak, who was brought on to “spearhead strategic growth and scaling,” according to a company press release. Hudak was formally a member of the board of directors of the company.

Paradigm Management, Sterling Partners and Harris Williams could not be reached for comment.

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