TPG snaps up New Mountain’s Convey Health

  • Sell-side advisers: Barclays, Goldman
  • Florida company projects ~$50 mln in 2019 Ebitda
  • Deal follows NMC’s $3.2 bln sale; Avantor’s $3.8 bln IPO

TPG Capital reached an agreement to acquire New Mountain Capital’s Convey Health Solutions, according to people familiar with the matter.

The transaction for the healthcare payer services company is valued at around $750 million, the people said.

New York’s New Mountain put Convey up for sale earlier this year, engaging Barclays Capital and Goldman Sachs to provide financial advice, Buyouts reported.

The company projects close to $50 million in 2019 Ebitda, up from about $10 million in Ebitda at the time of New Mountain’s initial 2016 investment, sources previously said.

Sources characterized the process as targeting sponsors eager to get into healthcare payer services, an area in which PE interest has accelerated in recent years. The process also produced some discussions around a partial stake sale involving Convey, according to the sources.

Convey, of Fort Lauderdale, Florida, provides outsourced benefits and compliance administration services to health insurance plans and pharmacy benefit management firms.

The company simplifies processes for Medicare Part D and Medicare Advantage programs. It manages everything from eligibility and enrollment processing to premium billing and payment processing.

Convey has achieved scale partly through M&A, merging with HealthScape Advisors, a management consulting firm, and Pareto Intelligence, a healthcare data analytics firm, in November. In 2017 it scooped up Gorman Health Group, a consulting and software services firm specializing in government-sponsored health plans.

New Mountain bought Convey from West Palm Beach, Florida’s Comvest Partners in October 2016.

For New Mountain, the deal comes on the heels of its approximately $3.2 billion sale of payment integrity company Equian to UnitedHealth Group.

The firm also took life-sciences-tools company Avantor public, raising $3.8 billion in the largest healthcare IPO in history. At the time of its May debut, New Mountain’s investment in Avantor had produced a gross multiple of invested capital north of 7x to date, Buyouts reported.

New Mountain and TPG spokespeople declined to comment, while Convey executives couldn’t immediately be reached.

Action Item: Check out TPG’s latest Form ADV: https://bit.ly/2So5vcP