Carlyle Group, whose investments range from oil refineries to nursing homes, says it has agreed to buy out Boston-based health-care investor TA Associates as majority owner of MedRisk, a King of Prussia-based maker of workers' compensation software.
MedRisk founder Shelley Boyce, chief executive Mike Ryan, and other managers will stay in place and continue to own a minority stake in the company. Carlyle money and know-how "will fuel our next stage of growth," Boyce said in a statement. Founded in 1994, MedRisk employed more than 400 after a West Coast acquisition in 2013. Seller TA said MedRisk employed 800 as of last year.
The company's yearly earnings (before interest, taxes, and depreciation/amortization) approach $85 million, PE Hub reported in an item last month, noting that MedRisk was for sale. MedRisk carried over $200 million in debt and was a "distant" competitor to industry leader One Call Medical Inc. as of early 2016, according to Moody's. The Carlyle deal is supposed to close by Dec. 31.
Neither side would say what Carlyle is paying. The investment will be partly funded by Carlyle Partners VI fund, whose investors include the New Jersey state pension system. Jefferies Finance LLC, Antares Holdings, and PSP Investment Credit USA LLC have agreed to lend Carlyle additional money to close the deal. Lawyers at Philadelphia-based Morgan, Lewis & Bockius advised MedRisk along with investment bank Centerview Partners. Law firm Deveboise & Plimpton, New York, advised Carlyle.
MedRisk has helped "17 of the top 20 workers' compensation insurance carriers" and most of the big workers' comp administrators "provide patients quicker access to higher-quality, lower-cost care from a national network of accredited providers," Stephen H. Wise, Carlyle's health-care chief, said in a statement. "We look forward to working closely with the MedRisk team to continue to grow this industry-leading franchise."