Axios Pro Exclusive Content

TPG buys back Convey in $1.1B take-private

Jun 21, 2022
Illustration of two speech bubbles, one with a red cross and the other with a dollar sign, and a "translation" symbol in the middle.

Illustration: Gabriella Turrisi/Axios

TPG Capital is buying back Convey Health for $1.1 billion, only a year after taking the health care payor services and tech company public.

Why it matters: This is the second boomerang take-private deal in recent weeks, after TPG and Clayton Dubilier & Rice agreed to re-acquire Coventrus (CD&R being the incumbent investor). It's also further indication that TPG is leaning into payor tech, having in April agreed to buy ClaimsXten from Optum for $2.2 billion.

Zoom in: The deal values Fort Lauderdale, Fla.-based Convey at $10.50 per share — a 25% discount to its IPO price of $14 per share.

  • The takeout price implies a 143% premium over Convey's closing share price on June 17, or a 99% premium over its 30-day volume-weighted average price.
  • Convey provides outsourced benefits and administration services for government-sponsored health plans.

Flashback: TPG in July 2019 acquired the business at a $750 million valuation from New Mountain Capital.

The big picture: Strong performance isn't enough in today's challenging public market environment. The negative sentiment permeating the broader universe of public health tech companies is making the opportunity to company build in the private markets increasingly appealing.

  • Convey despite its lukewarm share performance fits that profile. The company projects both revenue and EBITDA growth of about 18% year over year for 2022, saw EBITDA growth of nearly 35% in 2021, and has consistently beat consensus numbers.
Go deeper