Lightyear Capital LLC (“Lightyear”), a New York-based private equity firm focused on financial services, announced today that investment funds affiliated with Lightyear have agreed to acquire an indirect controlling stake in Health Plan One, Inc. (“HPOne” or the “Company”), a leading technology-enabled platform and online marketplace delivering end-to-end, direct-to-consumer enrollment solutions focused exclusively on the high-growth Medicare insurance market. Lightyear’s affiliated investment funds are purchasing equity from Peloton Equity and other individual investors. Such investors, along with HPOne’s senior management team, will remain shareholders in the Company. Financial terms of the transaction were not disclosed. The transaction is expected to close in July 2020, subject to regulatory approvals and the satisfaction of closing conditions.
Founded in 2006 by Chief Executive Officer Bill Stapleton, HPOne is a fast-growing, independent digital insurance broker headquartered in Trumbull, Connecticut. Using proprietary technology solutions coupled with deep industry knowledge, the Company provides an online marketplace for consumers purchasing Medicare plans, along with a range of outsourced sales, marketing, and contact services for national and regional health plans including MedicareUSA.com, the Company’s online Medicare enrollment portal. HPOne’s core differentiation is its exclusive focus on the Medicare health insurance industry, bringing innovative and performance-based solutions that benefit from the increasing digitization of insurance distribution. With state-of-the-art online marketing, multiple US-based contact centers, expertise in home-based workforce management, and an experienced management team, HPOne provides consumers with online tools to compare and purchase Medicare plans and its clients with the solutions they need to profitably grow and manage their businesses.
“With a strong reputation and significant expertise in the health insurance and insurance services sectors,” commented Stapleton, “we are excited to be partnering with Lightyear. We see numerous compelling growth opportunities and look forward to accelerating those initiatives as we enter this next chapter with Lightyear.”
Jim Foreman, Senior Advisor to investment funds affiliated with Lightyear and a former Executive Committee member at both Aetna and Willis Towers Watson, will join HPOne as Chairman. Foreman stated, “I am thrilled to be working with Bill and his management team as we continue to partner with health plans and build a best-in-class consumer experience in purchasing healthcare. There are a number of important tailwinds that we believe will propel the business forward: the transition from ‘feet on the street’ traditional brokers in a post-COVID-19 environment, the public policy interest in delivering Medicare solutions to a wider group of Americans, and the benefits of an enhanced commitment to and investment in data analytics.”
“The investment in HPOne reflects years of active efforts to identify and pursue digital insurance distribution companies, particularly those serving the rapidly growing Medicare market,” said Mark F. Vassallo, Managing Partner of Lightyear. “We believe Bill and his team have built an impressive platform to connect health insurance carriers directly with consumers in a $9.1 billion market, which we estimate is growing 11 percent per year. We look forward to working with them as they execute on their growth plans.”
Lightyear and its affiliated investment funds have significant experience owning companies that operate at the intersection of healthcare and financial services, including realized investments in Alegeus Technologies Holding Corp., a market leader in consumer-directed healthcare solutions, and Paradigm Management Services, LLC, the largest nationwide provider of outsourced catastrophic workers’ compensation case management services for insurance companies and self-insured employers. Lightyear’s affiliated investment funds’ current investment in Datalot Holdings, L.P. (“Datalot”) highlights the digital transformation across financial services, as Datalot is a leading provider of mobile and web marketing technology solutions for the insurance industry.