Why ChanceLight’s Sale Valuation Sparked Skepticism in the Autism & Behavioral Health Sector

The primary article, dating from January 24, 2018, reports that ChanceLight, formerly Educational Services of America, owned by Trimaran Capital, is being marketed for sale via Moelis, with marketing commencing in approximately November 2017. [1] Trimaran acquired ESA in 2004 via Fund II (which closed in 2000 with $1.04B). [1] As of an August 2017 regulatory filing, Trimaran had valued its remaining stake in ChanceLight at merely $25.7M (including realized proceeds $3.8M), implying a low current valuation relative to historical investment or revenue base. [1]

Financial performance: 2015 data presents revenue of approximately $135M and EBITDA of ~$17M. [1] Current marketing suggests that similar Ebitda levels are expected, perhaps in the low teens to ~$20M range. [1] This provides a typical EV/EBITDA multiple benchmark for valuation discussions — for a company in this space, multiples might range from ~6× to 10× depending on growth, risk, margin profile.

Segment structure: ChanceLight operates across multiple verticals—Education (alternative and special education programs with school district partners), Behavioral Health (in-home, clinic, school-based behavioral therapy, including ABA), Pediatric Therapy (home-based OT/PT/ speech), and specialized schools for special needs. [1] The autism/ABA component, though small, is strategically valuable, given strong PE interest illustrated by other M&A in the autism treatment space. [1]

Trimaran’s status: Described by the article as a “zombie PE firm,” which implies limited new investment activity and possibly a need to exit existing portfolio companies to return capital. [1] The low valuation of its residual interest in ChanceLight, relative to revenue scale and EBITDA, suggests underperformance or deteriorating margins, possibly due to reimbursement pressure, regulatory challenges, or lack of organic growth. [1]

Strategic implications and open questions:

• What level of growth has ChanceLight achieved since 2015? Any improvements in margin, scale, or reimbursement environment would materially impact valuation.
• Given regulatory risk in behavioral health and autism therapy (especially around Medicaid, ABC, licensing, insurance reimbursement), what is ChanceLight’s exposure to unfavorable policy changes?
• What buyer categories are likely? Strategic health & education services providers seeking scale, PE firms focusing on healthcare/education, or possibly roll-ups in ABA and special education.
• Trimaran’s low implied value suggests downside risk; unless Company can show significant improvement or growth since 2015, valuation may gravitate toward lower end of EBITDA multiple range.
• Risk that valuation in “teens to $20M” EBITDA assumes static growth; yet market comparables (Autism Learning Partners, Stepping Stones, etc.) indicate that firms with higher growth / narrow focus (ABA / autism) command premiums. [1]