New Mountain Capital Cuts Deal with Former Executive

New Mountain Capital has terminated a proposed $32 billion deal with former president of private equity Matt Holt and other investors, citing concerns over the bid's terms and structure.

The private equity firm informed clients in a letter that it had ended talks over the deal, which would have seen the acquisition of five portfolio companies: Datavant, Swoop, Machinify, Smarter Technologies, and Office Ally. The proposed transaction would have created a technology platform called Thoreau, which utilizes artificial intelligence to reduce healthcare costs.

According to sources, New Mountain Capital received multiple proposals and counter-proposals from Holt and other investors, with the final bid valued at $32 billion. The deal was backed by $12 billion in debt from JPMorgan Chase & Co. and Goldman Sachs Group Inc., as well as equity commitments from JPMorgan and other investors.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

New Mountain Capital cited concerns over the deferred payments, debt structure, and governance issues in the proposed deal. The firm also stated that the prolonged negotiation process had become a distraction to management and pending decisions at the companies.

In a revised proposal, Holt and his team sought to address some of the concerns, offering a larger stake in the new venture to New Mountain Capital. However, this proposal was also rejected by the firm.

New Mountain Capital may still pursue the idea of combining some of the companies, although without Holt's involvement. The firm stated that it continues to explore various structures, timetables, and exit paths for the companies, citing the potential for significant upside in the healthcare tech sector.

Key Figures:

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

• New Mountain Capital: Private equity firm
• Matt Holt: Former president of private equity at New Mountain Capital
• Thoreau: Proposed technology platform and holding company
• Datavant, Swoop, Machinify, Smarter Technologies, and Office Ally: Portfolio companies
• JPMorgan Chase & Co.: Debt provider
• Goldman Sachs Group Inc.: Debt provider

Financial Data:

• $32 billion: Proposed transaction value
• $12 billion: Debt commitment from JPMorgan Chase & Co. and Goldman Sachs Group Inc.
• $14 billion: Proceeds New Mountain Capital was set to receive from the deal