Financial terms were not disclosed, but a person familiar with the
matter said the deal values MultiPlan at around $4.4 billion. Since
its launch in 2012, all of Starr Investment Holdings' previous
private equity deals have been below $1 billion.
The deal underscores Greenberg's reinvention as a prominent
dealmaker. The 88-year-old former AIG chief executive and another of
his companies, Starr International, owned 12 percent of AIG before
its $182 billion rescue that began in 2008.
Greenberg claims the rescue was unfair to AIG shareholders and that
the Federal Reserve Bank of New York charged an excessive interest
rate on its initial loan. He is seeking billions of dollars in
Greenberg lost his appeal last month in a lawsuit against the New
York Fed. A second lawsuit by Greenberg against the U.S. government
is pending before the U.S. Court of Federal Claims in Washington,
MultiPlan, currently owned by private equity firms BC Partners Ltd
and Silver Lake, helps manage the claims process for big health
insurers and has a network of over 900,000 healthcare providers.
Swiss investment firm Partners Group is the other lead investor in
the consortium acquiring MultiPlan, which also includes a number of
undisclosed investors. Rather than manage a traditional private
equity fund, Starr Investment Holdings reaches out to investors on a
deal-by-deal basis to seek their participation.
This approach also informs Starr's investment horizon, which can go
beyond the typical five-to-seven-year period that private equity
firms tend to hold companies for.
"We are duration agnostic, we can invest for a day or invest
forever," Starr Investment Holdings Senior Managing Director
Geoffrey Clark said in an interview.
[to top of second column]
The insurance claims services sector has seen robust private equity
deal activity in the last few months, including KKR & Co LP's <KKR.N>
$2.4 billion takeover of Sedgwick Claims Management Services Inc and
$1.1 billion acquisition of Mitchell International Inc and Apax
Partners LLP's roughly $3 billion acquisition of One Call Care
Management Inc and Align Networks Inc.
BC Partners and Silver Lake bought MultiPlan in 2010 for about
$3.1 billion from rival buyout firms Carlyle Group <CG.O> and Welsh,
Carson, Anderson & Stowe.
BC Partners and Silver Lake each invested about $600 million in
equity when they acquired MultiPlan, according to a person familiar
with the matter.
The two private equity firms now stand to make more than two times
their money through the sale of MultiPlan, that person added,
pointing out that MultiPlan's cash flow increased by 50 percent
since 2010 thanks to operational initiatives undertaken at the
Starr Investment said the deal had fully committed financing from
Barclays Plc and J.P. Morgan Chase & Co. Bank of America Merrill
Lynch, Credit Suisse, Goldman, Sachs & Co; RBC Royal Bank; Dean
Bradley Osborne; LionTree Advisors LLC; and The Raine Group LLC
advised MultiPlan's owners.
(Additional reporting by Sruthi
Ramakrishnan and Kanika Sikka in Bangalore; editing by Don Sebastian
and Jonathan Oatis)
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