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Starr, Partners Group acquire Multiplan

Stocks in this article: JPM AIG

NEW YORK (The Deal) -- New York investor Starr Investment Holdings and Swiss private equity firm Partners Group have agreed to acquire healthcare cost-management technology provider Multiplan in a deal valuing the business at about $4.4 billion.

The sellers are technology-focused private equity firm Silver Lake Partners and U.K. buyout firm BC Partners.

Starr and its Zurich-listed co-investor bill themselves as joint lead investors but didn't disclose their respective weights within the partnership and the exact price of the deal.

Partners Group's New York managing director, Joel Schwartz, declined to comment on terms of the deal, or detail the debt-to-equity ratio of the investment. But he did say that the deal had fully committed financing from Barclays plc and JPMorgan Chase & Co.  (JPM - Get Report) with "market levels" of leverage and very favorable terms.

He said the agreement had taken "a few months" to put in place, but had not been achieved through an auction.

"It's been on an exclusive basis throughout," he said.

That exclusivity was partly based on the long-standing relationship between Starr, which is led by former American International Group  (AIG - Get Report) CEO Hank Greenberg, and New York-based Multiplan, according to the target's CEO Mark Tabak. "Starr's historical relationship with MultiPlan and its executives was fundamental in bringing our firms together," Tabak said in a statement.

"With the investment led by Starr and Partners Group, we have the long-term capital, strategic support and collective set of relationships to further grow our company and evolve our solutions in the rapidly-changing healthcare market and beyond."

Schwartz said the new investors plan to continue to run the business on the present model, of applying innovative technology and expanding its product offering to help deliver cost savings to both healthcare providers and consumers.

"We expect them to continue to expand their offering along the same lines," he said.

However, he added that the company's growth had been boosted in the past by acquisitions and it would likely continue to make acquisitions in future.

No-one from BC Partners was available to comment on the selling consortium's ownership or their returns on investment. BC Partners and Silver Lake bought the company from Carlyle Group and Welsh, Carson, Anderson & Stowe in 2010 in a $3.1 billion deal.

In the statement announcing the deal, BC Partners Managing Director Raymond Svide and Silver Lake Managing Partner Egon Durban said: "Since our investment in 2010, MultiPlan has successfully integrated Viant [Inc., which it acquired in 2009] and strengthened its foundation for long-term growth through enhanced technology capabilities, expanded customer relationships and deeper penetration into adjacent markets and new product lines."

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