Kinderhook closes acquisition of Medical Card System Inc.
Nearly seven months after announcing its intention to acquire Puerto Rico-based healthcare services organization Medical Card System (MCS), MHH Healthcare, L.P. announced it has closed the transaction.
MHH Healthcare is a platform company formed by Kinderhook Industries, LLC to invest in health plans, health maintenance organizations, and healthcare services organizations.
The transaction completes MHH Healthcare’s acquisition of MCS, including its three lines of business and client portfolio of approximately 400,000 insureds. The acquisition represents Kinderhook’s 52nd healthcare-related transaction.
The financial terms of the transaction were not disclosed.
“Our commitment to the MCS policy holders, providers and employees remains intact. We are excited to work with MCS management to continue to offer the best healthcare insurance options to the island of Puerto Rico,” said Chris Michalik, Kinderhook managing director and former chairman of WellCare Health Plans Inc.
“We’re confident that this transaction will stimulate innovation in a sector in which Kinderhook has a depth of experience and knowledge, which is why we believe the acquisition of MCS represents the best next step for all MCS stakeholders,” he said.
“This announcement represents a well-timed opportunity for continued success and positive momentum for our company in the Puerto Rico marketplace by providing additional resources to MCS. These enhanced resources will allow MCS to invest in service improvements, technology and employee talent,” MCS CEO Jim O’Drobinak said.
“These investments will improve our operations, expand our health care service delivery capabilities and continue our growth under the current management team, all of whom will remain in place after the transaction,” he said.
“Since the announcement of this transaction, the acquisition has been a transparent process for our employees, members, insureds, providers and clients. We firmly believe that going forward, all our constituents will see a new and improved MCS,” he added.
O’Drobinak further explained that the company will continue to collaborate with its provider network to keep offering its members and insureds the high-quality health care services they are accustomed to.
“We will also continue to innovate in the design of our products to push our standards of creativity and excellence,” he said.
“From an industry perspective, MCS will continue the path to constantly change the way we approach health care by incorporating the social determinants of health into the medical coverage. MCS is the standard for Puerto Rico-based healthcare plans, and we take that responsibility very proudly,” O’Drobinak added.
Meanwhile, Matt Bubis, Kinderhook vice president, said “The MCS model integrates a number of powerful healthcare themes including the need to address the social determinants of health through innovative products like the ‘Te Paga’ card.”
“MCS also demonstrates the importance of provider alignment and developing consistent touchpoints with members to drive better health outcomes,” he said.
“We look forward to partnering with Jim O’Drobinak and the MCS management team to continue to serve communities throughout Puerto Rico,” said MHH Healthcare CEO Jigar Desai.
Financing for the transaction was provided by Atlantic Park Strategic Capital Fund, L.P. Kirkland & Ellis LLP served as legal counsel, Bass, Berry & Sims PLC and Vidal, Nieves & Bauzá, LLC served as regulatory counsel, and MTS Health Partners, LP served as financial adviser to Kinderhook.
Skadden, Arps, Slate, Meagher & Flom LLP served as legal counsel, O’Neill & Borges LLC served as regulatory counsel, and Guggenheim Securities, LLC served as financial adviser to MCS.