The proposed sale to Madison Dearborn Partners is said to mark the culmination of a process steered by Benefytt Technologies' board of directors since July 2019

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Madison Dearborn Partners to acquire Benefytt Technologies. (Credit: Tumisu from Pixabay)

US insurtech company Benefytt Technologies has agreed to be acquired by funds affiliated with private equity firm Madison Dearborn Partners (MDP Funds) for a sum reported to be around $410m.

Based in Florida, the health insurance technology company is mainly focused on the development and operation of private e-commerce health insurance marketplaces, platforms for consumer engagement and insurance policy administration, and agency technology systems.

The insurtech company also has a range of Medicare-related insurance plans to offer from various carriers in the US. Besides, the company offers other types of health insurance and supplemental products for addressing consumers’ requirements.

Benefytt Technologies has been exploring strategic options since July 2019

The proposed sale to Madison Dearborn Partners is said to mark the culmination of a process steered by Benefytt Technologies’ board of directors since July 2019. The process involved exploring, reviewing, and assessing multiple potential strategic alternatives for the insurtech company.

Benefytt Technologies CEO and president Gavin Southwell said: “Following this comprehensive review, we believe Madison Dearborn is the right partner to deliver compelling and certain value to our shareholders.

“This transaction marks a new stage for the entire Benefytt team, and we look forward to moving ahead with a focus on continuing to offer innovative, technology-enabled services to the people and markets we serve.”

Madison Dearborn Partners will structure the all-cash deal as a tender offer of $31.00 per share that will begin shortly, which will be immediately followed by a merger.

Madison Dearborn Partners financial and transaction services team managing director Vahe Dombalagian said: “Benefytt’s technology-driven model has positioned it well in the evolving Medicare market and we believe we can help Gavin and his team continue to advance Benefytt’s product offering and service model.

“Our team has built an extensive resource network and brings significant industry experience, which we look forward to leveraging to support Benefytt.”

Upon closing of the deal, Benefytt Technologies will become a private company, which will be owned substantially by the MDP Funds. The insurtech company will be delisted from the Nasdaq Global Select Market, while its management team, including its present CEO, is likely to continue to lead it.

The completion of the transaction is likely to take place in the third quarter of 2020 depending on the successful tender of a majority of the company’s common stock, and also the fulfillment of other customary closing conditions.