Sun Capital Partners‘ portfolio company HealthPlan Holdings Services last month acquired HealthPlan Services Inc., American Benefit Plan Administrators Inc., Southern Nevada Administrators and Montgomery Corp. from Plan Vista Corp. Sun Capital assumed an approximate $40 million working capital deficit, but in return received $5 million in stock and $5 million in convertible notes from Plan Vista. Cerberus Capital Management LP financed the deal with a $10 million term loan and a $5 million revolver. Houlihan, Lokey, Howard & Zukin advised the sellers on the transaction.
“We’re enthusiastic about the acquisition, and we will continue to build upon each company’s strong franchise value within its market segment,” said Steven Liff, a vice president at Sun Capital. “Given the new structure and their financing partnership, Health Plan Holdings is well capitalized to ensure the proper investment in the business both from a growth and technology standpoint.”
Tampa, Fla.-based HealthPlan Holdings Services is a third party administrator focused primarily on the small-to-mid-sized employer group and individual marketplace, providing marketing, administration, technology and distribution outsourcing services to health-care providers, such as insurance companies, preferred provider organizations and health maintenance organizations.
El Monte, Calif.-based American Benefit Plan Administrators is an administrator of employee benefit plans focusing exclusively on providing administrative services for employee benefit plans of unionized workforces.
Blue Bell, Penn.-based Montgomery Management Corp. is a managing underwriter of stop-loss insurance for self-funded employer health plans and distributes its contracts primarily through third party administrators, insurance brokers and employee consultants.
Combined revenue for all four subsidiaries is about $111 million.
“There are a lot of synergies, and we plan on consolidating some of our technology at various subsidiaries, as well as consolidating some of the expense rationalization,” Liff said. “We’re also going to grow the customer base by adding core carriers, which has been a problem with the former company’s distress situation, and we think this company will be in position to grow the cash flow and sales of the business.”