Greenberg's Starr leads $4.4 billion MultiPlan acquisition

Mon Feb 17, 2014 6:42pm EST
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By Greg Roumeliotis

(Reuters) - Former AIG (AIG.N: Quote) 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 date.

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 billion.

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 Washington, D.C.

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 healthcare providers.

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 participation.

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.   Continued...

Former CEO of American International Group Inc, Maurice "Hank" Greenberg, checks his phone inside a car after leaving a building in downtown New York where he was deposed by the Attorney General's office March 10, 2010. REUTERS/Jessica Rinaldi