PROVIDENCE – Virgin Pulse Inc. on Wednesday announced plans to merge with HealthComp, a California-based third-party health care benefits administrator.
Terms of the merger with HealthComp were not disclosed, but the Wall Street Journal reported that the deal could be worth $3 billion. The companies expect to close the deal later this year.
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It also wasn’t immediately clear how the merger would affect Virgin Pulse’s headquarters in Providence. The company occupies several floors of the former Providence Journal building on Fountain Street, and it employs about 350 people locally, according to PBN’s 2023 Book of Lists.
Virgin Pulse, a subsidiary of Richard Branson’s Virgin Group Ltd., provides digital health and well-being programs for the workforces of 4,000 corporate clients.
The combined entity of Virgin Pulse and HealthComp is expected to serve more than 20 million members and address costs for more than 1,000 self-insured employers. The companies said HealthComp’s analytics database will also benefit Virgin Pulse’s health plan and health system clients by providing closed-loop data on health outcomes and the true ROI of investing in member experience and well-being programs.
Under the terms of the transaction, Virgin Pulse CEO Chris Michalak will continue as CEO of the new company.
Also, Virgin Pulse is backed by the investment firm Marlin Equity Partners, but New York private equity firm New Mountain Capital, which acquired HealthComp three years ago, will become the majority owner of the combined entity, the companies said.
Morgan Health, the health care investment arm of JPMorgan Chase, and Blackstone Credit, the credit investment arm of The Blackstone Group, are also providing some financial backing.
“This combination with HealthComp creates a new category in the health space that will change the way employers address the two-fold challenge of reducing costs and improving member outcomes,” Michalak said. “Together, we are addressing a problem that has plagued the industry for years – a misaligned, complex benefit structure that results in unmet needs and escalating costs. We are eliminating waste, friction, and preventable risks by putting members and their needs at the center of the ecosystem.”
“The combination of Virgin Pulse and HealthComp creates the first national value-based care platform company focused on employee health and outcomes. We are excited to work with Morgan Health, Blackstone, and Marlin to bring innovation at scale to this market,” said Matt Holt, president of private equity and managing director at New Mountain Capital.
