New Lines Of Biz Eyed For Health Care Co.

BC Partners and Silver Lake Partners plan to expand MultiPlan Inc. into new business lines, specifically workers’ compensation and auto insurance, according to Jamie Rubin, senior partner at BC Partners, and Egon Durban, managing director at Silver Lake.

The firms announced an agreement on July 9 to buy MultiPlan Inc., a New York-based company that helps insurers expand their physician networks, for $3.1 billion. The Carlyle Group and Welsh Carson Anderson & Stowe were among the sellers.

Rubin and Durban said that in the near-term, the firms intend to help the company continue to integrate its March acquisition of Viant, a provider of similar health care cost management services, from Ferrer Freeman & Co. and Welsh Carson Anderson & Stowe. The two shops also plan to improve the efficiency of MultiPlan’s information technology processes, Rubin and Durban said.

Founded in 1980, MultiPlan provides its services to insurers such as Aetna Inc. and Cigna Corp. as well as to health plan administrators and other payers of health care services. The company processes more than 100 million medical claims annually, and its network includes more than 5,000 hospitals, 115,000 ancillary care facilities and 625,000 doctors in the U.S. The company generates $600 million in annual revenues.

Rubin said the firms were attracted to the predictable revenue streams MultiPlan gets from its customers. The firms also like the fundamental trends in the health care industry, with more baby boomers seeking health care and demand for more coverage expected to rise thanks to recent health care legislation. “As long as people go to the doctor and have commercial health care coverage, this company can know what its revenue levels will be like,” Rubin said.

The investment for the buyers comes out of BC European Capital VIII LP, an $8.8 billion fund closed in 2005; and Silver Lake Partners III LP, a $9.3 billion fund closed in 2007.