July 26, 2021

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MHH Healthcare acquires MCS


MHH Healthcare, LLC (“MHH Healthcare”), a company formed by Kinderhook Industries, LLC (“Kinderhook”) to invest in healthcare organizations (“OSS”) and healthcare service organizations, announced today that a subsidiary of MHH Healthcare has entered into a definitive agreement to acquire Medical Card System, Inc. (“MCS” or the “Company”), a leading Puerto Rico-based medical health services organization.

The acquisition is expected to close later this year, subject to customary conditions and regulatory approvals, and will mark the second significant acquisition by a subsidiary of MHH Healthcare after the previous acquisition of GlobalHealth (“Global”). Additional terms of the transaction were not disclosed.

Based in San Juan, Puerto Rico, MCS is a leading health services organization that offers a variety of insurance plans and manages health care for Medicare Advantage and Commercial members throughout Puerto Rico. MCS is the 14th largest Medicare Advantage plan and the 7th largest dual-eligibility plan in the United States, serving more than 185,000 Medicare Advantage members and 205,000 commercial members. MCS is led by a strong management team and has demonstrated coordinated management capabilities focused on enhancing the member experience and improving the quality of life in the communities it serves. The addition of MCS will provide scale and infrastructure to complement MHH Healthcare’s expansion initiatives, beginning with new entries in the Texas and Arizona markets in 2022.

GlobalHealth is an Oklahoma-based OSS with offices in Tulsa and Oklahoma City. Global provides affordable health insurance coverage for the Medicare eligible population, as well as federal, state, educational and municipal government employees. Global currently serves approximately 13,000 Medicare Advantage members in the state of Oklahoma.

“Over the years, we have built a dynamic company with a great culture and mission at MCS that puts our members and our communities first when it comes to healthcare,” said Jim O’Drobinak, president and CEO. MCS executive. We’re

very excited to partner with Kinderhook, Jigar Desai and the team they have brought together at MHH Healthcare to continue driving value for our members and our employees. “

“MCS represents a unique opportunity to acquire a growing and innovative healthcare organization with an experienced management team in an industry in which Kinderhook has deep experience and knowledge,” said Chris Michalik, CEO of Kinderhook and former president of The Board of WellCare Health Plans, Inc. We plan to leverage MCS management’s vast experience in the Puerto Rican market in conjunction with our experienced leadership team at MHH Healthcare, led by CEO Jigar Desai, to continue to improve continuity of care for our policyholders ”.

“The MCS model integrates a number of important health issues, including the need to address the social determinants of health through innovative products such as the Te Paga card. MCS also demonstrates the importance of provider alignment and developing consistent points of contact with members to drive better health outcomes, ”said Jigar Desai, Chief Executive Officer, MHH Healthcare. “We look forward to partnering with Jim O’Drobinak and the MCS management team to continue innovating in product design and serving communities throughout Puerto Rico.”

“MCS has established itself as an innovative leader in the Puerto Rico health insurance market with a persistent focus on its benefit design and member well-being,” said Matt Bubis, vice president of Kinderhook. “We are excited about the next phase of growth, both in the existing Puerto Rican business and in our exciting expansion plans throughout the United States.”

Funding for the transaction was provided by Atlantic Park Strategic Capital Fund, LP Kirkland & Ellis LLP served as legal advisor, Bass, Berry & Sims PLC and Vidal, Nieves & Bauzá, LLC acted as regulatory advisor, and MTS Partners acted as as a financial advisor to Kinderhook. Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor and Guggenheim Securities, LLC acted as financial advisor to MCS. About Kinderhook Industries: Kinderhook Industries, LLC is a private investment firm managing more than $ 3.3 billion of earmarked capital. We have made more than 270 follow-up investments and acquisitions since its inception. Kinderhook’s investment philosophy is based on combining unique, growth-oriented investment opportunities with exceptional financial expertise and our unique network of operators. Our focus is on mid-market businesses with a defensible niche market positioning in the healthcare, environmental services / commercial, and automotive / light manufacturing sectors. We have a track record of success and consistency developing industry leaders.

For more information visit: www.kinderhook.com



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