Case Study

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Execution of Roll-Up Acquisition Strategy in Healthcare Industry

  • Location: Nationwide
  • Sectors: Health Insurance, Employee Benefits, Health Plan Administration
  • Ownership: Private
  • Situation Type: Buy-Side Advisory

Company Overview:

The Company is one of the largest providers of fully insured medical insurance in the U.S. and is the market leader in its core geographic market.


The Company approached Brookline with a desire to pursue growth through acquisitions, particularly outside its core geographic market. While the Company is the market leading health insurer in its geographic area, the underlying population is not growing, so the Company's leadership was actively seeking alternative opportunities to increase membership and revenue. The Company is also seeing a shift away from fully insured medical insurance to self-funded health insurance plans. With self-funded plans, companies self-insure up to a certain amount and outsource the administration of the health plan to a third party administrator, or TPA. Observing these trends, the Company's executives recognized an opportunity to grow by acquiring the companies (TPAs) that are providing these administration services.

Brookline's Solution:

Brookline recognized that the Company provides such comprehensive administrative solutions to its health insurance customers, it is just as much a TPA as it is a health insurer. Additionally, the Company is far better at administering health plans than most of the independent TPAs in the market. Brookline crafted a strategy that would allow the Company to acquire or "roll up" TPAs across the U.S., thereby leveraging a core competency (health plan administration), diversifying its business away from fully insured medical insurance customers, adding membership and tapping into new geographies. Brookline developed an acquisition criteria, identified attractive prospects, contacted those prospects, evaluated the opportunities, negotiated terms, quarterbacked due diligence and assisted in closing the transactions.


Brookline has advised the Company in its program that has acquired ten independent TPAs in 8 states including FL, GA, LA, MS, NC, PA, TX and WI in the first 36 months and is seeking additional acquisition opportunities in new geographic markets including the Midwest and Northeast. Throughout the process, the Company has become the most prolific acquirer of TPAs in the U.S. and has developed a reputation for being the "go to" acquirer of TPAs in the healthcare industry in the U.S. Brookline assisted the Company by strategically deploying excess capital in a way that created significant value, increasing membership and revenue, diversifying its revenue base and tapping into new sectors and geographies.

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