XLHealth raises $290 million, acquires Leprechaun LLC

BALTIMORE – XLHealth, focused on improving care for Medicare beneficiaries with chronic conditions, has completed a private placement of financing to raise $290 million.

As part of the transaction, the company completed its acquisition of Leprechaun LLC, a healthcare information and clinical services company for Medicare Advantage plans.

The transaction closed with funding provided by MatlinPatterson Global Opportunities Partners III LP, and MatlinPatterson Global Opportunities Partners (Cayman) III L.P., investment partnerships managed by MatlinPatterson Global Advisors LLC, a private equity firm. 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.

The funds will be used to meet statutory capital requirements and fund the Leprechaun acquisition and for general working capital, said Robert L. Cinquegrana, XLHealth’s CFO.

XLHealth, which began as a disease management company, now operates as a “special needs” Medicare Advantage plan that only serves beneficiaries with diabetes, congestive heart failure and end-stage renal dialysis. It operates in six states, providing care management to 75,000 beneficiaries.

XLHealth is paid a risk-adjusted, per-member-per-month fee by Medicare, said Jim Murphy, the company’s director of marketing.

“We have a robust program that offers a combination of nurses and other people on the ground in conjunction with a call center that coaches beneficiaries with their illnesses and diseases,” he said. “We use predictive modeling to target the sickest and those most in need of care.”