HCSC paid around $100M for TMG Health
NewSpring Capital and SCP Partners, Wayne, invested $8.3 million in TMG Health Inc. five years ago, and collected more than $10-to-$1 on that investment as Health Care Service Corp. of Chicago bought the Medicare administrator, which is based in King of Prussia and employs 1,200, mostly arond Scranton.
"It was a very good return -- more than ten times our money," Brian Murphy, partner in New Spring Capital, Radnor, says of Health Care Service Corp.'s purchase of TMG Health Inc., King of Prussia, which employs around 1,500, mostly around chief executive Mike Tighe's hometown, Scranton, in its Medicare payment-processing business. More on Health Care Service, of Chicago, and TMG in Mike Armstrong's column here.
Health Care Service bought another Philadelphia-area health-related company, MEDecision Inc. of Wayne, for $121 million in June. Like Oracle Corp., which has bought three local software firms so far this year, Health Care Service has found this a lucrative acquisition market. PhillyDeals item on MEDecision sale here.
SCP Private Equity Partners, Wayne, and an affiliate invested $4.8 million in TMG five years ago, and NewSpring's first investment fund contributed another $3.5 million, Murphy said. He wouldn't say how much Health Care Service ended up paying, but at 10-to-1 that implies at least $83 million, Murphy confirmed. Another source familiar with the transaction told us $100 million is closer to the mark.