Private equity groups BC Partners and Silver Lake have agreed to sell healthcare services business MultiPlan to a group led by Starr Investment Holdings and Partners Group.
Terms of the transaction were not disclosed, but a source close to the deal confirmed an earlier report in the Wall Street Journal that it was worth about $4.4 billion.
BC and Silver Lake bought the business in 2010 for $3.1 billion, reportedly contributing about $600 million of equity.
During their period of ownership, MultiPlan's profits increased by about 50 percent, thanks to a series of value creation initiatives. These included better integration of recent acquisition Viant, an IT efficiency drive and a series of acquisitions that allowed the business to expand into adjacent areas, like managed Medicaid.
Both firms stand to make more than double their initial investment from this exit. Following this sale, BC will now have returned about €1.4 billion to investors in its eighth fund, BCEC VIII, in the last six months alone, according to an LP source.
For Partners Group and Starr, the deal was approximately evenly split, Joel Schwartz, a managing director private Equity for the Americas, told Private Equity International.
The firms exclusively negotiated with the sellers, he added. Partners and Starr also invited a number of LPs to co-invest in the deal. The investment marks one of the largest deals Partners Group has done, according to Schwartz.
He declined to give specific information about the deal, but said the debt-equity split was in line with market standards. The transaction has fully committed financing from Barclays and JP Morgan.
Partners Group declined to specify which funds it used for the transaction, but said it used a number of funds. It also confirmed LPs with separately managed accounts were able to participate in the deal.