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Anthem-Cigna breakup gives rise to Summit’s HealthSun sale

The crumbling of Anthem Inc’s megadeal with Cigna Corp largely set the stage for the sale of HealthSun, the south Florida Medicare Advantage health plan and medical center network backed by Summit Partners.

Anthem, the country’s second largest health insurance company, said Wednesday it would buy HealthSun from a Summit-led investor group. The deal is Anthem’s first since the termination of its $54 billion proposed merger with Cigna earlier this year.

Summit completed its majority investment in HealthSun in November 2016, and shortly after Ron Schutzen was promoted from inside the company to CEO.

Summit managing director Darren Black said Wednesday the firm’s agreed sale of the Coconut Grove, Florida, company to Anthem resulted from unsolicited interest, and not a formal sales process.

“We certainly didn’t set out to sell the business this quickly,” Black said. “That said, I’m not surprised people did [express interest so soon]. When we did this deal, all of the large insurance companies were tied up with their [pending] mergers.”

Anthem and Cigna announced plans to unite in July 2015, but the deal was ultimately blocked by a federal judge in February of this year. At the same time, Aetna Inc’s proposed $37 billion tie-up with of Humana Inc also fell apart in February.

“We knew that either those deals would close and the companies would be distracted, or they wouldn’t, and they’d say, ‘we gotta go figure out what else is out there’,” Black said. “We had the benefit of being a Medicare Advantage plan in Florida, which is perhaps one of the most attractive [marketplaces].”

While Black declined to comment on any financial aspect of the transaction, a November ratings report by Moody’s disclosed that HealthSun’s pro forma revenues were approximately $744 million for the 12-month-period ended June 30, 2016.

HealthSun at the time encompassed about 36,000 Medicare Advantage members. The company serves about 40,000 members today, Anthem said in the deal announcement.

HealthSun focuses on patients that are eligible for both Medicare and Medicaid in the Miami-Dade and Broward counties. Its “dual-eligible” members receive treatment through its 19 wholly-owned primary care and specialty centers operated under the Pasteur and WellMax brands.

Anthem in February 2015 completed its acquisition of Simply Healthcare Holdings, a Coral Gables, Florida, managed care company. Terms weren’t disclosed, but the deal was reportedly valued at an estimated $1 billion.

Boston’s Summit sold DuPage Medical to Ares Management in August in a $1.45 billion deal. The firm is exploring the sale of MDVIP Inc, the nation’s largest provider of so-called “concierge medicine”, Buyouts previously reported.

Action Item: Get in touch with Summit’s Darren Black: dblack@summitpartners.com

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