Francisco Partners explores sale of Vendavo, Kinderhook invests in Puerto Rico’s 2nd largest Medicare Advantage plan in largest purchase ever

Francisco's Vendavo heads to market and Kinderhook buys Medical Card System.

Happy Monday!

Francisco Partners has put another tech business on the block. Vendavo, a provider of business-to-business price management technology, is working with Lazard on a sale process, which is in its early stages, sources familiar with the matter told PE Hub.

Denver-based Vendavo, backed by Francisco in October 2014, uses big data analytics to help the world’s largest companies in a variety of industries to optimize and manage complex pricing and deal terms.

Vendavo is growing at a low double digits rate annually, generating about $40 million in revenue, sources said. The company is projecting 2021 EBITDA in the mid-$20 million range and 2022 EBITDA and in the mid-$30 million range, they said. Check out Milana’s full report on PE Hub.

Elsewhere, Francisco, alongside minority investor Elliott Management, is preparing to put cybersecurity provider SonicWall up for sale, PE Hub reported earlier this month.

In April, Bloomberg wrote that Francisco was looking to sell its minority stake in Availity, a health-care information technology company backed by some of the country’s biggest health plans. That process is getting down to the end, sources recently told PE Hub.
Biggest-ever: In other news Kinderhook Industries’ MHH Healthcare has agreed to buy Medical Card System, Puerto Rico’s second-largest Medicare Advantage plan, with enrollment in such plan offerings on the rise.

The acquisition, which joins MHH subsidiary GlobalHealth, will mark Kinderhook’s largest transaction in history in terms of purchase price, a source familiar with the deal told PE Hub.

Puerto Rico is a unique market, with approximately 80 percent of US territory’s senior population now enrolled in Medicare Advantage, compared with about 40 percent broadly in the US, one source noted: “There’s a lot of creativity in the Puerto Rico market. It has moved quickly to provider-aligned healthcare.”

It’s also a concentrated market. The island territory’s other operators of MA plans include InnovaCare Health – which, doing business as MMM, or Medicare y Mucho Mas, is the island’s largest and oldest MA plan – in addition to Triple-S and Humana. Summit Partners earlier this year sold MMM to health insurance giant Anthem.

The deal comes as investors remain eager to invest behind the fast growth of the Medicare Advantage market, with a long runway of aging baby boomers continuing to drive demand. The MA market will exceed $1 trillion by 2023, according to CMS.

Read more on Kinderhook’s latest buy on PE Hub.

That’s it! As always, write to me at springle@buyoutsinsider.com with any tips, comments or feedback. Have a great week ahead!