U.S. specialty healthcare benefits manager eviCore is exploring a sale of the company or an initial public offering, hoping for a valuation of more than $4 billion, including debt, people familiar with the matter said on Thursday.
General Atlantic LLC, the investment firm which acquired a controlling stake in eviCore in 2014, is hoping an auction for the company will attract some of the large U.S. health insurers that are seeking to diversify their business, the sources said.
EviCore has hired investment banks to handle the sale process, and also to arrange an IPO in case any acquisition offers do not meet its valuation expectations, the sources said.
The company has 12-month earnings before interest, taxes, depreciation and amortization of around $300 million, the sources added.
General Atlantic and eviCore did not respond to requests for comment.
Based in Bluffton, South Carolina, eviCore provides healthcare benefits management and administrative services on behalf of clients consisting primarily of commercial health insurers and other third-party payers, including Medicaid Managed Care and Medicare Advantage plans.
It helps manage the benefits of more than 100 million people, in treatment areas ranging from specialty drugs and radiology, to cancer care.
Insurers turn to companies such as eviCore to help keep benefit costs down.
EviCore’s predecessor, MedSolutions Inc, was founded in 1992 as an owner and operator of diagnostics images center. It later divested its dialysis business and merged with benefits manager CareCore National.
The company has been growing rapidly in recent years, in part due to a series of acquisitions, including of health technology company QPID Health and clinical decision support company HealthFortis.
Since the planned $34 billion merger of health insurers Aetna Inc (AET.N) and Humana Inc (HUM.N) and the $45 billion merger of Cigna Corp (CI.N) and Anthem Inc (ANTM.N) were shot down on antitrust concerns, analysts and investors have speculated that health insurers would turn to niche areas, such as benefits management, in a bid for growth.