DETROIT, Aug. 2 /PRNewswire/ -- Blue Cross Blue Shield of Michigan today announced the sale of PPOM, a wholly owned for-profit subsidiary of Blue Cross Blue Shield of Michigan, to HMS Healthcare Inc., a newly formed holding company owned by Denver, Colorado based KRG Capital Partners, LLC and management.
PPOM, based in Southfield, MI, maintains the largest and most comprehensive Midwest access PPO network of more 380 hospitals and 55,000 physicians and other health care providers in Michigan, Ohio and Indiana. Its service offerings include the development and maintenance of healthcare provider networks for group health, workers' compensation and automotive/personal injury protection benefits as well as other ancillary administrative services. The company provides access to more than 1.1 million members in Michigan, Ohio and Indiana.
Richard E. Whitmer, president and CEO of Blue Cross Blue Shield of Michigan, said:
"While PPOM has provided us with a solid return, its continued growth and expansion requires a company poised to facilitate its future. KRG Capital is well positioned to help PPOM achieve that growth objective."
Mark Bartlett, Blues' executive vice president and CFO, said PPOM has been a strong investment since the Blues purchased it in 1997. He said the returns in PPOM have helped Blue Cross continue its social mission.
KRG declined to release the purchase price.
Jeffrey Connolly will remain as President of PPOM, and PPOM's management and the operational team will stay with the company. PPOM will continue to be a Michigan-based company.
"We are excited about the ownership change," said Connolly. "The sale will give PPOM new opportunities for growth while building on our core strengths of customer service, flexibility and broad geographic network coverage."
BCBSM was advised by MTS Health Partners, L.P. on this transaction. About Blue Cross Blue Shield of Michigan
Blue Cross Blue Shield of Michigan, a nonprofit corporation, provides health care benefits to 4.8 million members through a variety of plans: Traditional, Blue Preferred and Community Blue PPOs, Blue Choice Point of Service, and the Blue Care Network HMO. Blue Cross Blue Shield of Michigan and Blue Care Network are nonprofit corporations and independent licensees of the Blue Cross and Blue Shield Association. For more information, visit http://www.bcbsm.com/ .
About KRG Capital Partners
Founded in 1996, KRG is a Denver-based private equity buyout firm that currently manages over $860 million of committed equity capital and equity co- investments. KRG specializes in acquiring and recapitalizing unique and profitable middle-market companies. The firm seeks investment opportunities for its partners where KRG can work in concert with owners and operating managers who are committed to expanding their companies and becoming industry leaders. The result is a partnership that focuses on creating a significantly larger enterprise through a combination of internal growth and complementary add-on acquisitions. Since inception, KRG has invested in 18 "platform companies" and has completed 53 add-on acquisitions for those platforms. For more information on KRG Capital Partners, please visit http://www.krgcapital.com/ .
About HMS Healthcare
HMS Healthcare is a newly formed holding company established for the acquisition of Sloans Lake Managed Care ("SLMC") and PPOM LLC, two independent non-risk access preferred provider organizations ("PPOs"). PPOs contract with providers of healthcare services, aggregating together a network, which they then offer (or "lease") to payors which include insurance carriers, self- insured employers, union trusts and third party administrators ("TPAs"). Providers receive increased patient volume, while payors access cost effective healthcare for their benefit plan enrollees. SLMC, based in Denver, CO, maintains the largest access PPO network in Colorado, with a customer base including many insurance carriers operating in the state. PPOM, based in Southfield, MI, maintains the largest Midwest access PPO network in Michigan, Ohio and Indiana. The combined entity will provide access to healthcare for approximately 1.5 million people and have direct relationships with more than 500 hospitals and 60,000 physicians. KRG Capital Partners, LLC is the majority owner and lead sponsor of HMS Healthcare.
Blue Cross Blue Shield of MichiganCONTACT: Helen Stojic of BCBSM, +1-313-225-8113; or Deborah Wilson ofPPOM, +1-248-357-7766
