Growth private equity firmTA Associates has completed a significant growth investment in The Benecon Group (Benecon), a developer and manager of self-funded medical benefit programs. Financial terms of the transaction have not been disclosed.
Founded in 1991 by Samuel Lombardo and headquartered in Lititz, Pennsylvania, Benecon helps design and implement self-funded health plans for small-and-medium-sized businesses (SMBs). Via its Actuarial, Compliance, Finance and Producer Services divisions, Benecon offers a full suite of services for thousands of public and private employers across the United States. Benecon’s subsidiary, ConnectCare3, provides wellness consulting and clinical services for Benecon members, including patient advocacy, nurse navigation and chronic disease management. Benecon has enjoyed double digit annual growth for the past 10 years and has been cited by Inc magazine on four occasions as among the 500 fastest growing companies in America.
“We are thrilled to partner with the Benecon team,” says Jason Mironov, a Director at TA Associates who has joined the Benecon Board of Directors. “Benecon offers a unique model that allows public and private companies to more efficiently self-fund their employee medical benefit programs by leveraging the actuarial prowess and purchasing power of a national network, effectively lowering healthcare costs for thousands of employer groups and hundreds of thousands of members.”
“We owe our success in addressing the health insurance needs of middle market companies to our scale, our well-established and trusted relationships with third-party brokers, stop-loss providers and third-party administrators, and a strong track record built over nearly 30 years,” says Samuel Lombardo, Founder, Chairman and CEO of Benecon. “Given our compelling product offering, we see a number of opportunities to accelerate Benecon’s historically strong organic growth. With their decades of experience investing in the healthcare and business services sectors, we are confident that TA is the right financial partner to help us in these efforts and we welcome them as an investor in Benecon.”
“TA’s longtime commitment to supporting efficiency, quality care and cost containment in the US healthcare system is directly aligned with our mission at Benecon,” says Matthew Kirk, President of Benecon. “Healthcare cost reduction is particularly relevant today, given pandemic-induced spending pressures for businesses of all sizes, and it is gratifying to play a role in this effort. Our partnership with TA marks an exciting new chapter for Benecon that we believe will see meaningful additional growth for the company.”
“A number of factors continue to drive growth in the self-funded medical benefit market, including a need for better cost management and greater control over plan design,” says Michael Berk, a Managing Director at TA Associates who has also joined the Benecon Board of Directors. “While the companies that Benecon serves are the largest category of employers in the US, they remain underrepresented in terms of businesses enrolled in self-funded healthcare plans. Given this large and underpenetrated addressable market, we expect ongoing and significant growth opportunities for Benecon.”
Financing was provided by funds managed by the Credit Group of Ares Management and Varagon Capital Partners. Griffin Financial Group served as financial advisor to Benecon. Goodwin Procter provided legal counsel to TA Associates.
