New Mountain Capital pulled off the difficult feat of simultaneously acquiring and merging two companies. In December 2015, it bought payment integrity platform Equian and cost containment services and software provider Trover. The transaction led to the creation of the Equian operating across the US today, providing technology-enabled payment integrity and cost containment solutions to the healthcare and property and casualty industries.
At the outset, New Mountain Capital assisted Equian in establishing a board of independent directors comprised of leaders within their fields. It also lent a helping hand in other talent initiatives and strategic hires, such as the appointment of a new chief technology officer and a new chief operating officer to support the business as it scaled.
A key tenet of the value creation plan for the Indianapolis-headquartered business was inorganic growth via strategic M&A. Including Trover, New Mountain Capital worked with Equian’s management team to identify and execute on six acquisitions. Among these was the purchase of overpaid claims recovery specialist OmniClaim in 2018. The acquisition allowed Equian to build on OmniClaim’s strong customer relationships and further strengthen its position in the payment integrity market.
Investing in automation
Perhaps the most notable aspect of the company’s transformation, though, is investment in technology, including automation technology for data processing. The adoption of new technologies enabled the business to develop platform-based solutions that could harness growth driven by the US healthcare market’s shift to a value-based payment model. The investments also delivered benefits in terms of cost management and operating efficiency. For example, workflow enhancements resulted in improvements to key performance indicators such as conversion rates within audit and data mining.
At the point of exit, the company operated in all 50 US states and served more than 300 customers, including 22 of the top 25 healthcare payers.
The judging panel viewed New Mountain Capital’s work with Equian as “a great example of innovation in private equity”. As one judge commented: “The exit is a remarkable outcome and was not simply a product of being in the right place at the right time; it appears that real value was added by the sponsor.”