Morgan Stanley Capital Partners has launched a sale process for Clarity Software Solutions, three sources tell Axios.
What is happening: Three and a half years into its investment, MSCP is re-auctioning the Madison, Connecticut-based healthcare communications company.
- Triple Tree, which last advised Clarity, is being retained for sell-side advice again, sources say.
By the numbers: Clarity generates EBITDA and revenue of approximately $30 million and $100 million, respectively, according to two sources.
- About 40% of the business sells to payers, which sponsors are likely to find attractive, one of the people said.
- The company says it partners with plans that collectively cover more than 230 million lives covered, with 84 million communications distributed each year to members nationwide.
- Additionally, he says he processes more than 164 million data records each year.
How it works: In the area of healthcare document management, Clarity facilitates communication between providers and payers with members via cloud-based software.
- The company tracks, processes, prints and distributes healthcare ID cards, member guides, EOBs (Explanation of Benefits) and payment correspondence, among others, ensuring proper compliance and adapting to changing business needs.
What they say : Clarity is likely a sponsor deal, but other potential buyers could be strategists with a printing company – such as Zelis Healthcare, backed by Bain Capital and Parthenon Capital, or Change Healthcare, a source notes. (The latter may have his hands full as the trial of his proposed $13 billion merger with UHG nears).
Catch up fast: MSCP, part of Morgan Stanley’s roughly $10 billion Private Credit & Equity platform, acquired Clarity in January 2019.
- Constitution Capital Partners joined as a minority investor.
- As part of the transaction, Churchill Asset Management provided $90 million in debt financing in the form of a $15 million revolving line of credit and a $75 million term loan to support the OK, by PitchBook.
Yes and: For MSCP, Clarity represented the first healthcare deal from its $1.5 billion middle-market fund, North Haven Capital Fund IV – nine months after it recruited Steve Rodgers to lead a new healthcare effort for the platform.
MSCP declined to comment, and Triple Tree did not return requests for comment.