FSIC backs healthcare payment company merger

The Franklin Square/GSO BDCs have provided $260m in senior financing towards New Mountain Capital’s purchase of Trover Solutions, and its merger with Equian.  

The Franklin Square Investment Corporation (FSIC) business development companies (BDCs) have provided $260 million in senior first lien financing to support New Mountain Capital’s acquisition of Trover Solutions.

New York-based New Mountain bought Trover from Boston-based private equity firm ABRY Partners earlier this month and merged it with Equian, a company recently acquired from Great Point Partners, New Mountain announced in a statement on Friday.

The merger forms a payment and cost-containment platform for the healthcare, property and casualty insurance industries, according to the statement. The merged company will provide software and services, including prepayment clinical coding review, bill review, post-payment data mining and provider audits, as well as subrogation services.  

Louisville, Kentucky-based Trover mainly deals in subrogation services, which allows an insurer to pursue a claim through a third party that caused an insurance loss. The combined company will have about 1,100 employees serving 300 healthcare and insurance clients across the US. It is expected to have about $200 million in revenue. 

FSIC’s loan was levered at 5.1x debt to equity, said Brad Marshall, senior managing director at GSO. The capital was drawn from across the three FSIC BDCs, one of which is public and the others private. The vehicles are holding the entirety of the loans on their books, Marshall said. 

The Franklin Square BDCs are managed by Philadelphia-based Franklin Square Capital Partners and sub-advised by Blackstone-owned GSO. They have about $15 billion under management in total.