1 December 2008, Boston - Advent International Corporation and CCP Equity Partners have recently entered into a definitive agreement to sell Long Term Care Group, Inc. (“LTCG”), the nation’s leader in outsourced services to the long-term-care insurance industry and an emerging player in the geriatric care services market, to Genstar Capital.
LTCG was founded in 1996 through the acquisition of UnitedHealth’s Long Term Care Group. Since its inception, LTCG has played a vital role in shaping the long-term-care insurance market and has, over time, developed a compelling service offering and domain expertise that has resulted in a strong industry reputation and impressive client list. In April 2004, Advent and CCP led the buyout of LTCG. During this period, LTCG added several members of the management team, including CEO Bruce Baude and CFO Jeffrey Sjobeck. In collaboration with President and co-founder Peter Goldstein, the team was instrumental in driving the performance of the organization.
Advent and CCP’s investment supported the development of further value creation opportunities for the business. These included the acquisition and integration of Nation’s CareLink, the implementation of a best-in-class operating system, the successful conversion of several large, closed-block portfolios and the expansion into geriatric care management.
Today, LTCG administers approximately 20% of the total in-force policies in its market segment. With 1,200 employees, the business processes over 120,000 applications per year, bills over $1.5 billion of annual premiums and has over 27,000 claims under management. The business represents a robust and profitable growth platform. With its world-class operating system, the company has created a scalable IT architecture capable of handling significant further growth. Additionally, LTCG possesses both a contract-based recurring revenue model with high customer switching costs and a cost structure with significant operating leverage.
“It has been a pleasure working with the company over the past four years to create a leading outsourced provider to the insurance industry,” said John Maldonado, one of the Advent International Principals working with LTCG. “The management team is high-integrity, extremely motivated and has grown the profits of the business considerably.”
Advent International has been investing in the BPO and business services industries for 20 years and has funded over 25 businesses in the sector worldwide. In addition to LTCG, selected investments include: National Bankruptcy Services, a leading U.S. provider of bankruptcy monitoring and processing services to secured lenders; Equiniti, the pre-eminent UK provider of share registration services, retail investor services and employee benefits solutions; CAMS, the leading provider of outsourced back-office services to the asset management industry in India; and RAET, a leading Dutch payroll processing provider.
Credit Suisse acted as the M&A advisor, and Pepper Hamilton LLP served as legal counsel for the transaction.