• Company marketed off adjusted EBITDA of about USD 50m
• Process set to launch soon

Isto Biologics, a Thompson Street Capital-backed bone regeneration and cellular therapy company, is exploring a sale, according to three sources familiar with the matter.

DC Advisory has been hired to oversee the sale effort of the Hopkinton, Massachusetts-based company, the sources said.

The process has not yet launched, two sources said, with one of them adding that teasers are set to go out imminently.

Isto is being marketed off EBITDA of about USD 50m, two sources said, with one of them noting that the EBITDA figure is adjusted to the end of 2025. The third source said the company’s adjusted EBITDA includes anticipated 2025 revenue it will derive from products it is releasing later this year.

The company is aiming for an EBITDA multiple in the mid-to-high double digits, one of the sources said.

The sale is targeting mostly sponsors, one source said. Two sources said the company’s EBITDA multiple target could make strategics more logical buyers, as it could prove too high for some sponsors.

A potential strategic suitor is healthtech firm Medtronic, said one of the sources.

Thompson Street acquired Isto in 2016 from US private equity firms Alafi Capital and Ascension Ventures, Netherlands-based sponsor Life Sciences Partners BV, and US non-profit group Mid-America Transplant Services. It bought Isto using capital deployed from its TSCP IV fund.

Over its nine-year ownership, Thompson Street has made four add-on acquisitions for Isto, the most recent being California-based Advanced Biologics in October 2023.

Isto Biologics develops technologies to rebuild bone and heal degenerated or damaged cartilage through bone grafting and cell therapy.

DC Advisory declined to comment. Isto and Thompson Street did not respond to requests for comment.