Clearlake carves out nThrive’s tech arm in $1bn-plus deal

Pamplona formed nThrive in 2015 when it married MedAsset's healthcare revenue cycle management business with existing platform Precyse.

Santa Monica’s Clearlake Capital has clinched a deal to buy the software business of Pamplona Capital-backed nThrive, according to people with knowledge of the deal. 

The pending carve-out transaction is set to value the business at more than $1 billion, three sources told PE Hub

PE Hub originally wrote in mid-January that Barclays and Goldman Sachs were engaged to advise on an upcoming sale process for the business unit. Like most processes getting underway, the timeline was pushed back as covid-19 fueled market chaos in mid-March. 

Deutsche Bank and UBS are providing debt financing for the acquisition and advised Clearlake on the deal, one of the sources said.

It was about a month ago that a competitive process for the nThrive unit relaunched, sources said, commanding interest from several strategic buyers in addition to Clearlake and other sponsors.

Clearlake, an experienced carve-out investor, intends support future acquisition opportunities as it looks to build nThrive into a broader RCM [revenue cycle management] platform, one of the people noted. 

The person pointed to the success of other industry players like private equity-backed Waystar, which in August preempted the sale process for Francisco Partners’ eSolutions in a $1.3 billion-plus deal, PE Hub wrote.

For Pamplona, the portfolio company divestiture comes five years after the London- and New York-headquartered buyout shop formed nThrive through a highly complex deal structure.

The firm in November 2015 agreed to acquire MedAssets for an enterprise value of approximately $2.7 billion, combining its revenue cycle management segment with existing portfolio company Precyse. Pamplona simultaneously divested MedAssets’ group purchasing organization and performance-improvement business through a sale to VHA-UHC Alliance.

Clearlake’s purchase comes after Alpharetta, Georgia-based nThrive announced the formal establishment of two independent divisions – a technology division and a services division, effective October 1. The new c-suite team serving nThrive Technology is led by Sloan Clardy as CEO, the announcement said. 

The tech business produces around $100 million in adjusted EBITDA, some of the sources said.

Keeping busy

Clearlake has stayed active through the pandemic. Most recently, on Tuesday, the firm announced the completion of its acquisition of Zywave alongside the acquisition of Advisen. Through the pair of transactions, Clearlake is building a new software-as-a-service (SaaS) provider of front-office insurance solutions.

PE Hub originally wrote in September that Clearlake was set to acquire insurtech provider Zywave in a deal valued between $800 million and $900 million.

Also this week, Platinum Equity announced an agreement to sell PrimeSource to Clearlake. PrimeSource is a provider of specialty building materials serving residential, commercial and industrial new-construction and remodeling markets.

On the healthcare tech front, Clearlake portfolio company Symplr struck a $500 million-plus deal to acquire TractManager in October, PE Hub wrote. 

For Symplr, the deal is its latest move to build out a broader software platform in the healthcare governance, risk and compliance arena, bringing its combined EBITDA to about $130 million today, a source said.  

Representatives of Clearlake, Pamplona, Barclays and Goldman declined to comment. The company did not immediately return PE Hub‘s request for comment.