June 14, 2021

New York, NY – MHH Healthcare, LLC (“MHH Healthcare”), a platform company formed by Kinderhook Industries, LLC (“Kinderhook”) to invest in health plans, health maintenance organizations (“HMOs”), and healthcare services 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 healthcare 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 following the prior acquisition of GlobalHealth (“Global”). Additional terms of the transaction were not disclosed.

Headquartered in San Juan, Puerto Rico, MCS is a leading healthcare services organization offering a variety of insurance plans and managing care for Medicare Advantage and Commercial members throughout Puerto Rico.  MCS is the 14th largest Medicare Advantage plan and the 7th largest dual-eligible plan in the United States, servicing more than 185,000 Medicare Advantage members and 205,000 Commercial members. MCS is led by a strong management team and has proven medical 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 into the Texas and Arizona markets in 2022.

GlobalHealth is an Oklahoma-based HMO with offices in Tulsa and Oklahoma City. Global provides affordable health insurance coverage for the Medicare-eligible population as well as federal, state, education, 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 Chief Executive Officer of MCS. “We are very excited to partner with Kinderhook, Jigar Desai, and the team they have assembled at MHH Healthcare to continue to drive value for our members and our employees.”

“MCS represents a unique opportunity to acquire a growing and innovative healthcare services organization with an experienced management team in a sector in which Kinderhook has a depth of experience and knowledge,” said Chris Michalik, Managing Director at Kinderhook and former Chairman of WellCare Health Plans, Inc. “We plan to leverage MCS management’s vast experience in Puerto Rico in conjunction with our seasoned leadership team at MHH Healthcare, led by CEO Jigar Desai, to continue to improve the continuum of care for our members.”

“The MCS model integrates a number of powerful healthcare themes including the need to address the social determinants of health through innovative products like the Te Paga card. MCS also demonstrates the importance of provider alignment and developing consistent touchpoints with members to drive better health outcomes,” said Jigar Desai, Chief Executive Officer of MHH Healthcare. “We look forward to partnering with Jim O’Drobinak and the MCS management team to continue to innovate on product design and serve communities throughout Puerto Rico.”

“MCS has established itself as an innovative leader in Puerto Rico with a focus on benefit design and member wellness,” said Matt Bubis, Vice President at Kinderhook. “We are excited for MHH Healthcare’s next phase of growth.”

Financing for the transaction to be provided by Atlantic Park Strategic Capital Fund, L.P. Kirkland & Ellis LLP served as legal counsel, Bass, Berry & Sims PLC and Vidal, Nieves & Bauzá, LLC served as regulatory counsel, and MTS Health Partners, LP served as financial adviser to Kinderhook.  Skadden, Arps, Slate, Meagher & Flom LLP served as legal counsel, O’Neill & Borges LLC served as regulatory counsel, and Guggenheim Securities, LLC served as financial adviser to MCS.

 

For additional information about this transaction, please contact: 
Christian Michalik
Managing Director
(212) 201-6782
cmichalik@kinderhook.com
 
Matt Bubis
Vice President
(212) 201-6788
mbubis@kinderhook.com

 


About Kinderhook Industries

Founded in 2003, Kinderhook Industries, LLC is a private investment firm that manages over $3.3 billion of committed capital. We have made in excess of 250 investments and follow-on acquisitions since inception. Kinderhook’s investment philosophy is predicated on matching unique, growth-oriented investment opportunities with exceptional financial expertise and our proprietary network of operating partners. Our focus is on middle market businesses with defensible niche market positioning in the healthcare services, environmental / business services, and automotive / light manufacturing sectors. We have a track record of successfully and consistently building industry leaders.

For more information, please visit https://www.kinderhook.com