By Greg Roumeliotis
Feb 17 Former AIG boss Maurice "Hank"
Greenberg's Starr Investment Holdings LLC said on Monday it had
agreed to take over health insurance claims processor MultiPlan
Inc in what is by far its biggest private equity investment to
Financial terms were not disclosed, but a person familiar
with the matter said the deal values MultiPlan at around $4.4
billion. Since its launch in 2012, all of Starr Investment
Holdings' previous private equity deals have been below $1
The deal underscores Greenberg's reinvention as a prominent
dealmaker. The 88-year-old former AIG chief executive and
another of his companies, Starr International, owned 12 percent
of AIG before its $182 billion rescue that began in 2008.
Greenberg claims the rescue was unfair to AIG shareholders
and that the Federal Reserve Bank of New York charged an
excessive interest rate on its initial loan. He is seeking
billions of dollars in damages.
Greenberg lost his appeal last month in a lawsuit against
the New York Fed. A second lawsuit by Greenberg against the U.S.
government is pending before the U.S. Court of Federal Claims in
MultiPlan, currently owned by private equity firms BC
Partners Ltd and Silver Lake, helps manage the claims process
for big health insurers and has a network of over 900,000
Swiss investment firm Partners Group is the other lead
investor in the consortium acquiring MultiPlan, which also
includes a number of undisclosed investors. Rather than manage a
traditional private equity fund, Starr Investment Holdings
reaches out to investors on a deal-by-deal basis to seek their
This approach also informs Starr's investment horizon, which
can go beyond the typical five-to-seven-year period that private
equity firms tend to hold companies for.
"We are duration agnostic, we can invest for a day or invest
forever," Starr Investment Holdings Senior Managing Director
Geoffrey Clark said in an interview.
The insurance claims services sector has seen robust private
equity deal activity in the last few months, including KKR & Co
LP's $2.4 billion takeover of Sedgwick Claims Management
Services Inc and $1.1 billion acquisition of Mitchell
International Inc and Apax Partners LLP's roughly $3 billion
acquisition of One Call Care Management Inc and Align Networks
BC Partners and Silver Lake bought MultiPlan in 2010 for
about $3.1 billion from rival buyout firms Carlyle Group
and Welsh, Carson, Anderson & Stowe.
BC Partners and Silver Lake each invested about $600 million
in equity when they acquired MultiPlan, according to a person
familiar with the matter.
The two private equity firms now stand to make more than two
times their money through the sale of MultiPlan, that person
added, pointing out that MultiPlan's cash flow increased by 50
percent since 2010 thanks to operational initiatives undertaken
at the company.
Starr Investment said the deal had fully committed financing
from Barclays Plc and J.P. Morgan Chase & Co. Bank of America
Merrill Lynch, Credit Suisse, Goldman, Sachs & Co; RBC Royal
Bank; Dean Bradley Osborne; LionTree Advisors LLC; and The Raine
Group LLC advised MultiPlan's owners.