MultiPlan Inc. is merging with a special purpose acquisition company in an $11 billion deal that will take the health-care-services provider public, according to people familiar with the matter.
The company, currently owned by private-equity firm Hellman & Friedman, will merge with Churchill Capital Corp. III CCXX, +1.50% , a SPAC run by former Citigroup Inc. banker Michael Klein that went public in a February initial public offering, the people said.
The transaction, the value of which includes debt, would infuse MultiPlan with up to $3.7 billion of new equity and convertible debt, including $700 million from existing investors and $2.6 billion from outsiders — among them sovereign-wealth funds, mutual funds and family offices, the people said. The company plans to use the new money for purposes including paying down debt, purchasing a portion of the current owners’ stake and funding its balance sheet.
It will continue to be run by existing management, including longtime Chief Executive Mark Tabak, the people said.
MultiPlan’s platform is used by insurance companies such as UnitedHealth Group Inc. UNH, +0.02% and Cigna Corp. CI, +0.94% to find cost savings in health-care claims. MultiPlan estimates its algorithms find nearly $20 billion in medical cost savings annually. It takes a percentage of those savings as revenue, typically between 5 cents and 13 cents on the dollar.
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