Great Point Partners has sold Vālenz Health, a provider of medical cost and claim management services, to Kelso & Company.
Valenz is a provider of medical cost reduction and claims flow management services to self-insured employers, third-party claim administrators, brokers and benefits consultants, trust and labor organizations, stop-loss carriers, healthcare delivery networks, and health/dental plan payers.
Valenz was founded in 2004 by Chairman Josh Carder and is headquartered in Phoenix, Arizona.
GPP acquired Valenz in 2017 (then United Claims Solutions) and grew the company’s revenues by 30% per year and its enterprise value by over 700%.
In partnership with the Valenz team, GPP completed eight add-on acquisitions which expanded its distribution channels, increased market penetration, and added greater data transparency to medical costs and reimbursement rates. The Valenz add-ons included Inetico (2017), Zebu Compliance (2018), Kozani Health (2021), Health Cost Control (2022), Certus Management Group (2022), MCM Solutions and its subsidiary Med-Care Management (2022), and VerifPoint (2022).
“We are proud of the accomplishments the collective GPP and Valenz team has made in expanding Valenz’s footprint, strengthening its network, and fostering growth opportunities for the future,” said Noah Rhodes, a managing director and head of private equity at GPP.
“GPP leveraged its broad network of advisors fostered through its experience with prior investments in the payment integrity field to transform our business through strategic M&A, ultimately growing Valenz’s revenue by over 500%,” said Rob Gelb, the chief executive officer of Valenz. “We’re grateful for their help in scaling our business and our partnership with GPP.”
“We appreciate the importance of the payment integrity sector in simplifying and improving access to health care, and we look forward to seeing Valenz continue to grow in its next chapter,” added Eddie Hjerpe, a senior vice president at GPP.
In addition to Valenz, GPP’s past investment experience in the payment integrity sector includes Equian which GPP acquired in 2007. During its eight-year hold, GPP completed eleven add-on acquisitions, arranged multiple debt financings for acquisitions as well as a dividend recapitalization, and increased EBITDA more than ten-fold. Equian was sold to New Mountain Capital in 2015 and was later sold to United Healthcare in 2019.
Great Point makes both control and minority investments of $7 million to $50 million in healthcare companies that are based in the US, Canada or Western Europe. Typical targets will have revenues of $10 million to $100 million and $2 million to $12 million of EBITDA. Sectors of specific interest within healthcare include biopharmaceutical services and supplies, alternate site care, medical device contract manufacturing and information technology enabled businesses. Great Point was founded in 2003 and is headquartered in Greenwich, Connecticut.
New York City-based Kelso & Company is one of the oldest and most established firms specializing in middle-market private equity investing. Since 1980, Kelso has invested over $19 billion of equity capital in more than 140 transactions.
TripleTree was the financial advisor to Vālenz Health on this transaction.
© 2023 Private Equity Professional | June 28, 2023
