The investment community finished 2010 in a frenzy of deal making – Odyssey sold York Claims to ABRY, Progressive Medical was bought by Stone Point, Genex bought Intracorp from CIGNA for stock, Sedgwick is buying SRS, Humana bought Concentra – and I’m sure there are others I’m forgetting. Now, just when you thought it was time to take a breath, along comes info that another deal is done.
Word[opens pdf] is that Genex has bought PT manager Network Synergy Group.
[note release came out after initial publication of this post]
NSG will operate as a separate organization under Genex with current leader John Hanselman staying on as NSG head.
How this will work at Genex is TBD; their current PT network provider is Universal SmartComp, whose President, Chris Feeney, has strong ties to Genex’ founders. I find it hard to believe Genex will switch their business from USC to NSG, but Genex wouldn’t have bought NSG unless there was some significant financial – or strategic – benefit.
This will be interesting to watch.
This is the latest in a series of ‘recent work comp space’ deals that involve Stone Point – who owns Genex, third party biller Stone River (and soon Progressive Medical), and a chunk of Sedgwick. Less recently, Stone Point acquired TPA Cunningham Lindsey and did a joint venture with broker Lockton to purchase Alexander Forbes International Risk Services (AFIRS), an international insurance broker. Stone Point, like ABRY Partners, is staking out a major position in the work comp services business, consolidating their holdings, adding service providers and rolling up TPA business while taking out competitors.
While the Genex-NSG deal is almost certainly one of the smallest in terms of valuation, it is yet another indication of the drive to increase top line revenues that appears to be a major driver of private equity’s work comp strategy.
Jan
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