Tampa health insurance tech company Benefytt Technologies has agreed to sell to a Chicago private equity firm in a deal worth around $625 million.
Madison Dearborn Partners offered the NASDAQ-traded company $31 per share in cash, the companies announced last week. The deal also includes Benefytt’s debt, said senior vice president of finance Michael DeVries, and is expected to close by the end of August.
Benefytt’s senior management, including CEO Gavin Southwell, is expected to remain in place once it becomes a private company. The company has 509 employees, including 301 in Tampa. A statement about the deal said Benefytt “plans to maintain its operations in Tampa.”
“There are no planned reductions,” DeVries said, “but rather this transaction will allow for Benefytt to grow with additional capital.”
Benefytt develops and operates health insurance e-commerce platforms, offering Medicare-related plans from an array of providers. Until a name change in March, it was known as Health Insurance Innovations. In 2019 it had revenues of $381.8 million, and a net income of $36.7 million.
Founded in 2008 and headquartered in Carrollwood, the company has had an up-and-down ride.
After going public in 2013, its stock traded at a low of nearly $4 in mid-2016, amid worries the Affordable Care Act would restrict sales of short-term health plans. By the end of the year, the company’s stock had rebounded 166 percent — the highest leap of any public Tampa Bay company. In 2018, it hit an all-time high of $61.65, and topped a Fortune list of the fastest-growing companies.
Over the past five years, the company has faced heightened legal scrutiny. The Massachusetts attorney general’s office is in the midst of a five-year investigation of what it has alleged were deceptive sales and marketing practices. In December, the company paid $1.5 million to settle a similar case in Washington. Another inquiry in California is ongoing.
Last year, it was named in a class-action lawsuit alleging it and other Florida insurance companies conspired to sell health care policies that failed to comply with the Affordable Care Act. The company has called the complaint meritless.
With capital holdings worth $23 billion, Madison Dearborn has invested in more than 140 companies since the 1980s, including PayPal, MetroPCS, SiriusXM, Yankee Candle, Univision and Topps. Its current stable of subsidiaries includes a half-dozen medical companies.