| NEW YORK
NEW YORK Aug 19 Private equity firm Apax
Partners LLP is exploring a sale of U.S. healthcare information
technology company TriZetto Corp, hoping to fetch as much as $3
billion including debt, according to people familiar with the
London-based Apax has hired investment bank JPMorgan Chase &
Co to run an auction for TriZetto, a software vendor to
the U.S. health insurance industry, the people said this week.
TriZetto will target other companies in its sector as
potential buyers, such as information technology consulting
company Cognizant Technology Solutions Corp, although
private equity firms are also expected to weigh offers, some of
the people added.
TriZetto had 12-month earnings before interest, tax,
depreciation and amortization of more than $190 million as of
June 30, one of the sources added.
The sources asked not to be named because the matter is not
public. Apax and TriZetto declined to comment while JPMorgan and
Cognizant representatives did not immediately respond to
requests for comment.
TriZetto provides information technology solutions,
including care management and the administration of benefits, to
the healthcare industry. The company says it reaches 245,000
healthcare providers, representing more than half of the insured
population in the United States.
Apax took the Englewood, Colorado-based company private in
2008 for $1.4 billion. Uncertainty over the impact of healthcare
exchanges on payors weighed on TriZetto in the run-up to U.S.
President Barack Obama's healthcare reforms, though it has since
improved both cash flow and margins.
Moody's Investors Service Inc upgraded TriZetto's credit
rating in June, citing operational improvements, cost management
and strong perpetual license revenue. The company had 12-month
revenue of $682 million to the end of March, Moody's added.
TriZetto is the latest in a string of companies serving the
U.S. health insurance industry to hit the auction block, hoping
for a high valuation at a time when payors and providers of
healthcare seek new technology solutions to cut costs.
In March, private equity firms Silver Lake Partners LP and
BC Partners Ltd sold health insurance claims processor MultiPlan
Inc for $4.4 billion to a consortium led by Maurice "Hank"
Greenberg's buyout firm Starr Investment Holdings LLC.
Greenberg is the former chairman and CEO of
American International Group Inc.
Blackstone Group LP, the world's largest private
equity firm, bought healthcare information technology company
Emdeon Inc for $3 billion in 2011.
(Additional reporting by Olivia Oran in New York; editing by