I’d have to say “Yes.”
Several sources have confirmed that the rumored acquisition of Avizent by York Claims is an all-but-done deal.
York was a small, low-price NYC-based TPA a decade ago, a subsidiary of AIG (who had bought the company from the founding family) that won business on low bid awards. THe offices were modest (to say the least), staff over-burdened and under-qualified. Over the last ten years, the company has
evolved been transformed into what is now a well-regarded, well-positioned TPA with offices in a dozen states, thousands of customers, and a growth record that’s pretty impressive given the economic conditions of the last few years.
Purchased by management and private equity firm Bexil in 2002, York was acquired by Odyssey (another private equity firm) in 2006, where York’s growth accelerated through acquisition and new clients. York acquired several TPA and related businesses including Southern California Risk Management Associates (SCRMA) and Bragg and Associates, expanding the company’s reach in California and the midwest.
Columbus Ohio-headquartered Avizent looks to be the next company purchased by York. Not to be confused with Advisen, Avizent is a well-regarded TPA that has also grown, albeit primarily via new business acquisition. With its roots in the old Frank Gates organization, Avizent added FA Richard (FARA) in 2010, a major deal that greatly expanded Avizent’s business in the south.
The contract is done, due diligence essentially completed, and it’s just details and timing now.
What does this mean?
There’s been a lot of consolidation in the claims administration industry. Industry leader Sedgwick has been acquiring various and sundry claims services and claims related entities for several years, Gallagher Bassett bought GAB Robins back in 2010, and regional TPAs have been consolidating – or closing – as the soft market has dramatically affected their business.
These deals have removed competitors and added strength in different geographic areas and industry sectors.
Now that the market looks to be hardening, TPAs are positioning themselves for organic growth. As insurance premiums increase and insurance becomes harder to find, more employers are going to turn to self-insurance. The TPAs that have survived the brutal conditions of the last few years are – in general – well positioned to flourish.
(Note I asked both entities for comment; if I hear back I’ll provide an update)
I’d have to say “Yes.”