The exhibit floor at the workers comp conference is abuzz with rumors about sales; companies on the block, new transactions for TPAs, and new business for vendors.
Amongst the rumors are several that don’t appear to be based on fact, including the pending sale of Medata. When asked about the transaction, CEO Cy King looked incredulous. King stated “there’s lots of interest in the investment community and no interest on the part of Medata. It’s just wishful thinking.”
Sedgwick has been capturing business from competitors at a rapid rate. Loew’s will move to Sedgwick shortly as will Boeing. The word in the market is Sedgwick is pricing their claims services at extremely competitive rates; 20% to 30% under the incumbent. The big TPA is also pushing their managed care vendors hard for price reductions. OK so why?
It could be that Sedgwick is prepping for an IPO. Management stock options will vest in the event of a deal, UHC has been divesting other non-core assets, and the company is recruiting big names, all activities commonplace at companies looking to sell.
Among other companies reportedly on the block are MCMC (no surprise there), and Bunch and Associates (I’ve asked Bunch about this and it has been repeatedly denied, but the rumor persists).
More to follow, including corrections where necessary.
Nov
19
Sedgwick is able to bid lower TPA fees due to their revenue sharing deals with Coventry on the managed care and repricing. Sadly, these self-insured employers who switched to Sedgwick will end up paying more when all costs are totalled. They should have done their due diligence.