February 5, 2023

Futureality

Future Depends on What You Do

CVS seeks customer for rewards administration organization BSwift

CVS is seeking a customer for BSwift, the gains technological innovation small business it obtained eight decades in the past, sources tell Axios.

What is actually happening: A Goldman Sachs-run divestiture course of action is nicely into its 2nd round, resources say.

  • Deal textbooks were distributed in early July, with bids submitted at minimum a handful of months back, 1 of the sources states.
  • The method at first specific a broad variety of opportunity strategic and non-public equity customers, sources say.

By the numbers: BSwift is projecting about $230 million and $50 million of 2022 revenue and EBITDA, respectively, sources say.

  • BSwift serves 65,000 employer teams, boasting that it drives 25% more cost-effective premiums amid customers and 98% consumer retention.

What they’re indicating: Expansion has been gradual sitting down under the umbrella of CVS-owned Aetna, but sources say BSwift is fantastic at what it does — delivering vital technology for employee gains browsing, enrollment and administration.

  • “It is really even now a powerful asset” but, one supply states, “could use more TLC.”

Context: The prepared divestiture isn’t all that surprising contemplating how public CVS has been about its intentions to shift closer to the individual and treatment delivery. (Primary care, in distinct.)

💭 Our assumed bubble: Sources say the BSwift procedure begun out “quite broad,” which alerts to us that there is just not an obvious established of consumers for the asset.

  • Strategics could obtain the firm and cross-provide BSwift’s technological innovation, or a sponsor may possibly see a more substantial opportunity to roll up other positive aspects software package belongings or double down on affected person engagement.

Condition of engage in: Businessolver, yet another options provider for gains administration and engagement, was obtained by Stone Stage Funds in December — maybe location the stage for CVS to place out feelers for renewed fascination in BSwift.

Flashback: In late 2014, Aetna purchased BSwift from Boston-based mostly PE company Good Hill Associates for around $400 million. (CVS then acquired Aetna in late 2018.)

  • Great Hill had invested in BSwift only 7 months before — suggesting quick and sizable return for the PE organization targeting investments of $25 million to $150 million at that time (it has considering the fact that long gone up in size).
  • It also suggests that Aetna was gung-ho on the technologies platform and presumably bought BSwift on direct approach.

The bottom line: Whoever purchases BSwift — and at what value — is not promptly very clear. Natural beauty is in the eye of the beholder. CVS and Goldman declined to comment.