BC Partners and Silver Lake are to acquire New York-based MultiPlan from rival private equity firms The Carlyle Group and Welsh, Carson, Anderson and Stowe for $3.1 billion, a source familiar with the situation confirmed. The firms involved declined comment on the size of the transaction.
Apart from the takeover of gaming group Gala Coral by a group of its mezzanine lenders in May, the MultiPlan transaction will be the largest deal between financial sponsors this year, according to data provider Dealogic. Other notable secondary buyouts in 2010 include the $1.7 billion sale of Michael Foods by Thomas H. Lee Partners to the private equity arm of Goldman Sachs and TPG’s acquisition of Vertafore from Hellman & Friedman and JMI Equity for $1.4 billion.
BC Partners, a London-headquartered private equity firm, will be equal equity partners with Silver Lake, a firm targeting buyouts in the technology sector. Debt financing is being provided by three co-leading banks: Credit Suisse, Barclays, and Bank of America Merrill Lynch.
A group of investors led by Carlyle originally acquired Multiplan, a healthcare cost management company, in 2006. Carlyle is set to make more than three times its original investment, according to a report in the Wall Street Journal.
The deal will be Silver Lake’s first investment in the healthcare sector.
Barclays, Credit Suisse, Simpson Thacher & Bartlett and PricewaterhouseCoopers are advising BC Partners and Silver Lake on the transaction, while Goldman Sachs and Latham & Watkins are advising Carlyle, Welsh Carson, and MultiPlan.
This is the third time BC Partners and Silver Lake have teamed up to invest. In 2008, the two private equity firms acquired Intelsat, a provider of fixed satellite services, from a group of financial sponsors including Permira and Apax Partners for $16.5 billion. The two firms also partnered to invest in Unitymedia, a German cable satellite television provider. The Unitymedia deal was understood to have generated an IRR of 40 percent for BC Partners when it exited in late 2009.