UST, the global IT services company, has sold off a healthcare subsidiary to private investment firm Bain Capital for a reported $1.3 billion in cash. The deal allows the Aliso Viejo-based company to concentrate on “high-growth areas.”
After the acquisition of UST HealthProof was completed, Bain merged it with Boston-based HealthEdge, which it acquired from Blackstone Inc. earlier this year in a deal valued at about $2.6 billion. The combined entities create a claims operating system serving more than 115 health plans.
“This milestone allows UST to focus on the transformative technologies we lead in,” Krishna Sudheendra, chief executive officer of UST, said in a Sept. 4 news release announcing the sale.
While UST and Bain did not release a purchase price, people familiar with the matter told the Business Journal the cash portion of the transaction amounted to $1.3 billion. The Financial Times said an additional $300 million is to be paid out when certain performance milestones are met.
AI, Cloud, Data Modernization
By divesting UST HealthProof, UST said in the news release it “has aligned its strategic focus around high-growth areas such as enterprise AI, cloud transformation, data modernization, and platform engineering.”
Goldman Sachs and J.P. Morgan Securities LLC acted as financial advisors and Davis Polk & Wardwell LLP as legal counsel to UST.
UST says it remains one of the largest and fastest-growing healthcare technology enterprises, with a more than 5,000-strong healthcare team, and more than 20 years of industry expertise.
“With a customer retention rate of more than 98% over the last five years, UST remains a trusted partner for payers and providers in addition to pharma and health tech companies,” UST said.
No Impact on OC Workforce
“The transaction with Bain will have no impact on UST’s Orange County-based workforce,” a UST spokesperson told the Business Journal.
UST reported more than $1.9 billion in revenue last year. The figure has been steadily climbing since the $1.1 billion it reported in 2019 as the company continues to set ambitious growth targets.
The firm’s client list consists mostly of Fortune 500 and Global 1000 companies.
UST counts AWS, Microsoft and Google Cloud among its strategic technology partners; Salesforce and SAP among its business application partners; and Adobe and Oracle among its enterprise application partners.
The company is making a major push in AI for its customers and has been keeping up with AI developments internally as well.
