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Another transaction in work comp

Reuters reported Friday that Apax partners, owners of One Call Care Management and Genex, is “preparing to bid close to $2 billion for peer Helios, people familiar with the matter said, in what would be one of the workers’ compensation sector’s biggest mergers.”

The story indicated private equity firms Hellman & Friedman and TPG Capital are also looking at Helios.  Word is there is quite a bit of interest in the big PBM.

Leaving aside the Reuters reporters’ confusion about ACA and workers’ comp, what’s notable is the timing – the bid will be in later this month – and the valuation – a very hefty price indeed.

Helios, the product of a merger between Progressive Medical and PMSI, is the largest workers’ comp PBM.  The company also has ancillary businesses in MSAs and DME/HHC; in total revenues are likely above a billion dollars.  That makes for perhaps a two-times revenues valuation.  Of course, that might not be “high” at all; valuations are based not on top line but on earnings, and Helios is a very well run firm in a profitable space.

Given PMSI was bought by H.I.G. Capital some years back for about $40 million, then purchased for probably 8-10 times that figure a couple years ago and merged with Progressive, that’s a truly remarkable accomplishment.  Kudos to Executive Chair Eileen Auen and co-CEOS Tommy Young and Emry Sisson – and their very talented and focused staff.

Before anyone jumps to any conclusions, let’s recall that Apax is reportedly “preparing” a bid – and other investment firms are also very much in the running.  This is a very attractive asset, so do not be surprised if the process takes a bit longer than expected, and a different firm comes out on top.

What does this mean for you?

perhaps more industry consolidation.  perhaps not.


One thought on “Another transaction in work comp”

  1. Joe,

    So One Call is going to put all of the WC industry conferences out of business unless they are willing to have an exhibit area with 1 booth :)

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Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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