XLHealth Corporation Completes $290 Million Financing

BALTIMORE--(BUSINESS WIRE)--XLHealth, a Baltimore-based company focused on improving the healthcare of chronically ill seniors, today announced the successful completion of a private placement worth approximately $290 million. As part of the transaction, the company has also announced the completion of its acquisition of Leprechaun, LLC, a healthcare information and clinical services company for Medicare Advantage plans.

“With this investment, we’re poised to address the burden that chronic illness puts on our healthcare system”

The transaction closed with funding provided by MatlinPatterson Global Opportunities Partners III L.P., and MatlinPatterson Global Opportunities Partners (Cayman) III L.P., investment partnerships managed by MatlinPatterson Global Advisors LLC, a private equity firm with $9 billion in commitments and assets under management. Under the terms of the financing, MatlinPatterson has committed to an aggregate amount of approximately $290 million. A portion of the financing is subject to regulatory approvals which are anticipated to occur in the next 30 days. GS Capital Partners, LP, the private equity arm of Goldman, Sachs & Co. which helped fund the company’s growth in 2004, will continue as an investor of XLHealth.

XLHealth will use the funds for ongoing operations, to strengthen statutory capital needs for Care Improvement Plus, its special needs health plan, and to expand the company’s healthcare information technology division with the acquisition of Leprechaun and further development of the company’s proprietary disease management software platform, XLCare™.

“With this investment, we’re poised to address the burden that chronic illness puts on our healthcare system,” comments Paul Serini, executive vice president of XLHealth. “Our growth potential and the progress we have made are built upon our experience as a leading disease management company and our ability to leverage this experience to effectively manage the medical expenses of our health plan members.”

Corporate Evolution

Founded in 1997, XLHealth has a long history as an industry leader in providing outsourced disease management services to chronically ill seniors. XLHealth is currently the owner and operator of Care Improvement Plus, one of the nation’s largest chronic condition Special Needs Plans (C-SNP) -- disease management-focused health plans offered to Medicare beneficiaries with chronic illnesses such as diabetes and heart failure.

Chronic illness places a large financial burden on the U.S. economy, a burden that is estimated to bankrupt Medicare before 2020 if unchecked (http://www.cms.hhs.gov/ReportsTrustFunds/downloads/tr2007.pdf). The potential market for chronic condition special needs plans is expected to double by 2030 as the nation’s population ages and faces increasing healthcare costs. XLHealth’s evolution positions it to play a key role in Medicare’s renewed focus on approximately nine million participating beneficiaries with chronic illness that account for a disproportionate share of healthcare spending. Based on the company’s experience as a disease management company focused on the needs of seniors with chronic illness, XLHealth expects to continue to reduce hospitalizations by improving the quality of care for the approximately 75,000 Medicare beneficiaries it currently manages.

Leprechaun Acquisition

XLHealth recently acquired Leprechaun, LLC, a provider of technology and consulting services designed to improve efficiencies in Medicare Advantage plan member assessment, diagnosis, data management and claims. Leprechaun’s informatics and sophisticated predictive modeling tools identify incomplete or inaccurate diagnostic and treatment coding for Medicare Advantage plan members. This allows health plan clients to improve efficiencies and streamline the coding process, resulting in greater accuracy and completeness in the information required to address members’ healthcare needs.

About XLHealth

XLHealth (http://www.xlhealth.com), which is focused on improving the healthcare of chronically ill seniors, was founded in 1997 as Diabetex by a group of business executives and physicians. XLHealth is currently the owner and operator of Care Improvement Plus, one of the nation’s largest chronic condition Special Needs Plans (C-SNP). Headquartered in Baltimore, Md., XLHealth recently announced its acquisition of Leprechaun, LLC, a provider of technology and consulting services designed to improve efficiencies in Medicare Advantage plan member assessment, diagnosis, data management and claims. XLHealth has earned Full Accreditation from the National Committee for Quality Assurance (NCQA) under its standards for patient and practitioner-oriented accreditation of disease management programs.