Apax Partners

MagnaCare, founded in 1990, processes and administers healthcare claims for customers that utilize the company’s proprietary, fully-integrated medical delivery networks. The company is one of the largest PPOs in the New York metropolitan area, serving a variety of self-insured labor union funds and commercial employers.

MagnaCare has developed broad and comprehensive physician, diagnostic and hospital networks that encompass over 58,000 physicians, 500 diagnostic centers and labs and virtually all of the hospitals in New York and New Jersey.

Recognizing the attractiveness of the company’s fee schedules, its differentiated service approach, the enormous growth potential available in the New York metropolitan region and the significant opportunity to increase penetration of its products and services, Saunders Karp & Megrue, now part of Apax Partners, invested $29.8 million in MagnaCare in December 2002. Upon completion of its initial investment, Magnacare developed a strategic plan focused on strengthening a number of key areas that has allowed the company to deliver a comprehensive set of healthcare delivery products and solutions to its customers.

Specifically, the plan focused on:

- Strengthening of the senior and middle management team

- Re-engineering of key business processes

- Improving the company’s technology operating systems platform and financial reporting infrastructure

- Introducing of new healthcare management products

- Developing a new marketing platform

We tapped into our broad healthcare services network to recruit talent and worked closely with existing management to execute the plan. As value-added board members, we also took an active role in the pinpointing of areas where investments would be necessary to take Magna Care Holdings to the next level. Our extensive experience with growth oriented healthcare services companies was invaluable as Magnacare executed its strategic plan and implemented its growth strategy.

“MagnaCare’s new management team has improved every aspect of its operations. We have worked together to build a comprehensive set of products and solutions for customers, implement a series of sales and marketing initiatives and improve further on its high levels of customer service. MagnaCare is now very well positioned to offer ‘one stop shopping’ to its customers and to capitalize on a variety of attractive market opportunities,” said Buddy Gumina, Partner, Apax Partners.

“Apax Partners was very quickly able to appreciate the potential growth opportunity that MagnaCare represented. Since Apax Partners came on board in 2002, they have worked closely with management to help  refine the company’s business operations and bolster the management team. Their input was critical to our setting in place a structured, aggressive growth plan for the company” Bill Sullivan, President and CEO of MagnaCare Holdings, Inc.