Charterhouse in healthcare exit to Riverside

The mid-market firm has exited its 2006 investment in Camelot, a behavioral health and alternative education company, in a deal estimated at under $100m.

Charterhouse Group has sold behavioral health and alternative education company Camelot to The Riverside Company.

Terms of the transaction were not disclosed, but a source close to the situation estimated the deal size to be under $100 million. Charterhouse invested in Austin, Texas-based Camelot in 2006. The firm said it was attracted to the company after identifying an increasing trend of behavioral disorders in the US youth population. Since making its original investment, Charterhouse has grown the company from six to fifteen schools.

“The incidents of autism has continued to go up, and the amount of qualified providers, both on the education side and the residential services side , is limited in terms of their ability to meet that demand,” Charterhouse managing director Taylor Cole told PEO. “We recognised that that was an emerging theme and that the value proposition was compelling.”

Cole added that he anticipates services surrounding the incidents of autism to continue to grow in the future.

Charterhouse invested in Camelot from its $447 million fourth fund, which is nearly fully invested, having made 13 portfolio investments and 6 realisations. The deal represents the second healthcare services exit the firm has made in the past six months, following the $260 million sale of Chamberlin Edmonds, a provider of “government program eligibility and enrollment services” for healthcare facilities, in September 2010.

Charterhouse focuses on the healthcare services, business services and consumer products and services sectors. Since its founding in 1973, the firm has invested over $2 billion in equity and has established over 100 platform companies.

The February issue of Private Equity International will offer an exclusive, inside look at Riverside's investment selection process.