Apollo’s Intrado seeks buyer for Health Advocate

Demand for Health Advocate's employee wellness offerings is only accelerating in today’s environment as organizations start transitioning back to the workplace, sources said.

Health Advocate, a unit of Apollo Global Management’s Intrado, is back in the market amid a global health crisis that has encouraged a sharper focus on employee health and wellness, according to five sources familiar with the matter. 

Goldman Sachs and Triple Tree are conducting the sale process, with preliminary bids from prospective buyers due in a week or so, the people said. 

Health Advocate, of Plymouth Meeting, Pennsylvania, is marketing approximately $55 million in EBITDA, sources said. A deal could value the business in the 12x-to-14x range, one of people said. That would suggest a potential price tag anywhere from just under $700 million to almost $800 million. 

This is Health Advocate’s second time in the market since Apollo completed its $5.2 billion take-private of Intrado in October 2017. Formerly called West Corp, Intrado is largely known for its conference-call services. 

The decision to return to the market was buoyed by the business’s strong performance through the covid-19 crisis, sources said. The business unit previously evaluated a sale in 2018, PE Hub wrote. 

Broadly, employee wellness is something many companies are focused on, with demand for such offerings only accelerating in today’s environment as organizations start transitioning back to the workplace, sources said. Health Advocate’s healthcare-specific services are further compelling.  

Sitting within Intrado, Health Advocate offers data-driven insights to help employers and their employees navigate the health-insurance system, along with an employee assistance program and access to telehealth services, among other things. 

At its simplest level, some might liken Health Advocate to a call-center business, but it’s much more sophisticated than that, one of the people said. The company’s skilled representatives help coordinate multiple healthcare providers, for instance, resolving issues relating to medical claims and benefits – which can be especially helpful to individuals facing chronic conditions.

According to its website, Health Advocate works with 20 percent of Fortune 500 companies and 12,500 other organizations nationwide. 

Health Advocate was founded in 2001 by a group of former Aetna execs, including President and CEO Michael J. Cardillo. 

Intrado (then West Corp) in May 2014 acquired Health Advocate for about $265 million, excluding working-capital adjustments. 

The process for Health Advocate kicks off as another employee wellness process remains long in the works. 

Marlin Equity’s employee wellness platform VirginPulse continues to seek a buyer, with its timeline pushed back after coronavirus fueled market volatility in March. PE Hub wrote in January that Morgan Stanley had been engaged, with its process originally targeting a $2 billion-plus outcome. 

Spokespersons with Apollo and Goldman Sachs declined to comment. Health Advocate and Triple Tree didn’t return PE Hub‘s requests for comment.

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