Tailwind Capital in $60m going-private deal

The former Thomas Weisel Capital Partners group agrees to buy up all outstanding shares of Trover Solutions, an insurance services company, in an all-cash transaction.

New York and San Francisco-based Tailwind Capital Partners, the merchant banking affiliate of Thomas Weisel Partners, announced an agreement to acquire publicly traded Trover Solutions for $60 million (€48 million) in equity.


Under the terms of the agreement, Tailwind Capital will pay $7 per share in cash for all outstanding shares of Trover common stock, according to a press statement. CapitalSource Finance has signed a commitment letter to provide senior debt financing. The deal is expected to close in the first half of 2004.


Trover provides outsourced insurance subrogation and other claims recovery services to the private healthcare payor and property and casualty industries. Insurance subrogation is the term used for recouping money owed to insurance companies from third-party party clients, such as health claims of car accident victims owed from the insurance company of the party responsible for the accident.


According to Tailwind Capital principal Jeff Raker, Trover was an attractive buy due to its experienced company management and its dominant market position. Raker also said the company’s services intersected many of Tailwind Capital’s sector focuses, including technology, healthcare and business services.


Raker said Trover is more than twice the size of the next two largest US players, both of whom are also private companies, in this “fragmented sector.” He said about half of the health insurance companies in the US do these services themselves, while many others rely on many small market players to handle various aspects of the claims process.


Tailwind Capital Partners was formerly known as Thomas Weisel Capital Partners until it underwent a management change in the last year. Today, Tailwind Capital manages the $1.3 billion fund with the same middle-market growth strategy in healthcare, technology and business services, and media and communications with a virtually brand new investment team that was uninvolved with the fundraising, closed January 2000.


Tailwind’s previous investment was a 90 percent controlling stake in technology tradeshow company Key3Media, which emerged from federal bankruptcy protection and was renamed MediaLive International last June.