Blackstone to Fund $3 Billion HealthComp-Virgin Pulse Merger

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(Bloomberg) -- Blackstone Inc. is helping fund the combination of New Mountain Capital’s HealthComp Holding Company LLC and Marlin Equity Partners’ Virgin Pulse, valuing the health-care merger at about $3 billion, according to a person familiar with the transaction.

The alternative asset manager is the sole lender in a credit facility supporting the transaction, said the person, who requested anonymity to discuss a private transaction. The combined company will provide more than 20 million members and over 1,000 self-insured employers with health-plan design and management, preventative care and digital therapeutics, according to a press release.

The new company will have a capital structure that consists of rolled-over equity from the existing owners, a new equity injection, junior preferred equity, senior secured debt and holding company level notes that pay a fixed interest in kind, said the person. Representatives from Blackstone, New Mountain and Virgin Pulse declined to comment beyond the press statement. Representatives from Marlin and HealthComp didn’t respond to requests for comment beyond the press statement.

Blackstone had previously led a first lien financing for HealthComp, priced at 550 basis points over the secured overnight financing rate, according to a filing in June. The firm was also a lender, in addition to private credit managers including BC Partners and Oaktree Capital Management, to Virgin Pulse, according to their business development company filings.

The existing relationship provided Blackstone with comfort to commit to the entire debt financing, though the firm might sell portions of the facility to its own or New Mountain’s limited partners, according to the person. New Mountain Capital will be the majority owner of the combined entity, according to the press release.HealthComp, a health-plan administrator, backed by New Mountain in November 2020, according to a press release.

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