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Transactions

March 2013
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Background

Marlin & Associates (M&A) had known both ABILITY Network and IVANS, Inc. for some years. ABILITY, a Bain Capital Ventures portfolio company, is a leading web-based health information network for hospitals, skilled nursing facilities, home health agencies, physicians and clinics. It is America’s largest network for connecting a wide variety of healthcare providers to government payers. IVANS was a privately held company, owned by over 30+ private investors, and provided the healthcare and property-casualty (P&C) insurance industries with fully managed network, electronic data interchange, and interface solutions to government payers as well as insurance companies.



Overview

As an innovative company with advanced technology and solutions, backed by a large financial sponsor, M&A believed that ABILITY would be highly interested in buying the healthcare network portion of their largest competitor, IVANS, to create the largest network for CMS connectivity. However, they were likely to be only interested in the healthcare network portion of IVANS and not in the company’s P&C business. M&A was also aware that, under the right set of circumstances, the owners of IVANS would likely be receptive to a transaction. 

In order to effectuate the sale of IVANS healthcare network to ABILITY, Marlin & Associates had to identify another party that would simultaneously buy the P&C side of the business from ABILITY. IVANS shareholders were concerned about the adverse tax consequences of splitting the healthcare and P&C businesses. M&A identified an insurance software vendor, Applied Systems as the most suitable buyer for IVANS P&C operations – and noted that Bain Capital Private Equity was an investor in the company. Working with Bain Capital, M&A was able to facilitate a transaction whereby ABILITY bought IVANS in its entirety in a tax-effective transaction and then immediately sold the P&C portion of IVANS to Applied Systems. For ABILITY, this transaction created one of the largest healthcare technology companies, ultimately resulting in a majority recapitalization to Summit Partners for $550 million in April 2014.

M&A Role

Marlin and Associates acted as the exclusive strategic and financial advisor to Bain Capital Ventures on the acquisition. M&A undertook a comprehensive search for identifying suitable buyers for IVANS and positioned ABILITY + Applied Systems as the most logical buyers for IVANS. Our firm conducted a comprehensive valuation of IVANS (including a break-up value analysis of the two business lines) and worked diligently on the deal to craft materials, initiate conversations and negotiate the terms.

The transaction closed on April 2013.

Press

Marlin & Associates advises Bain Capital Ventures on one of the Year€™s Most significant Healthcare Technology Transactions

March 08, 2013

Marlin & Associates, the boutique investment bank and strategic advisory firm announced today that Marlin’s client, Bain Capital Ventures’ portfolio company, ABILITY® Network Inc., a market-leading healthcare technology company, has entered into a definitive agreement to merge with Stamford, CT-based IVANS®, the largest provider of secure insurance data communication services to the US healthcare and Property & Casualty Insurance community - trusted by more than 350 insurance carrier customers and 30,000 independent agents nationwide.  The press release can be read here.

Ability also has entered into a definitive agreement to sell the Property and Casualty business of IVANS to Applied Systems Inc., a leading provider of insurance software. ABILITY and Applied Systems are portfolio companies of Bain Capital Ventures and Bain Capital, respectively.

Marlin & Associates acted as exclusive strategic and financial advisor to Bain Capital Ventures, the venture and growth capital affiliate of Bain Capital, one of the world's leading private, alternative asset management firms, with approximately $65 billion in assets under management worldwide. 

“This is one of the healthcare industry's most exciting transactions in years. This combination will significantly benefit the industry and can address and reduce the administrative complexity of connecting payors and providers,” said Afsaneh Naimollah, Partner at Marlin & Associates.

The merger is expected to close within 90 days, subject to standard closing conditions.

Marlin & Associates is one of the most active investment banking and strategic advisory firms providing strategic and financial advice to worldwide buyers and sellers of middle-market technology firms.

This is the fourth significant recent transaction in the healthcare technology sector on which M&A has advised.  In February 2012, Marlin advised NaviNet, the nation’s largest real-time healthcare communication network on its acquisition by Lumeris Corporation, the innovative, cloud-based health IT provider; Pittsburgh-based, Highmark Inc., Horizon Blue Cross Blue Shield of New Jersey (Horizon), and southeastern Pennsylvania’s Independence Blue Cross (IBC).

Marlin & Associates is headquartered in New York, NY and has additional offices in San Francisco, CA; Washington, DC; Toronto, Canada; and Hong Kong, China serving companies that provide information and technology to a wide range of communities including those that serve the banking, capital markets, insurance, marketing and healthcare arenas.

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