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Greenberg joins in $4.4B provider network deal

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(Bloomberg) — Maurice “Hank” Greenberg’s Starr Investment Holdings has agreed to buy MultiPlan Inc., a manager of claims for large health-care insurers, from two private equity firms.

Starr teamed up with Partners Group A.G. of Switzerland to purchase New York-based MultiPlan from BC Partners Holdings Ltd. and Silver Lake Management LLC, the firms said in a statement yesterday. The statement didn’t disclose financial terms.

The purchase price is about $4.4 billion, according to three people with knowledge of the transaction who asked not to be identified because they weren’t authorized to speak publicly. The two private equity firms purchased MultiPlan for about $3.4 billion in 2010, two of the people said.

MultiPlan was founded in 1980. Today it has contractual relationships with more than 900,000 health care providers, and it handles about 40 million claims annually, according to today’s statement. The company leases use of its network to insurers, self-insured employer health plans, government programs and other payers.

The new Patient Protection and Affordable Care Act (PPACA) public exchange plans have put provider networks in the spotlight, by encouraging some carriers to try to use narrow networks to hold down prices, and other carriers to use especially large or high-quality networks to set themselves apart from competitors.

Rich Tauberman, a spokesman for Starr, and Silver Lake spokeswoman Gemma Hart declined to comment on the purchase price. Representatives for BC Partners and Partners Group in New York didn’t immediately respond to emails and calls seeking comment.

“With the investment led by Starr and Partners Group, we have the long-term capital, strategic support and collective set of relationships to further grow our company,” MultiPlan Chief Executive Officer Mark Tabak said in the statement.

Starr Investment Holdings, an investment firm, forms part of Starr Companies, which is headed by Greenberg, the former chairman of American International Group Inc. (NYSE:AIG).

Starr approached the sellers and MultiPlan hadn’t been put up for auction, one of the people said.

The Wall Street Journal reported Feb. 16 that the companies were close to a deal for $4.4 billion, citing people the newspaper didn’t identify by name.

–Editors: Edward Evans, Kevin Miller


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