What do these acquisitions mean?

Two just-announced acquisitions are an indicator of where things are in today’s work comp services world.

Tech firm Mitchell (recently bought by KKR) will acquire IME and peer review firm MCN.  Based in Seattle, privately-held MCN is one of the larger independent firms in that space, has a national network of 13,000 physician reviewers and a solid customer list. Brian Grant MD founded the company 30+ years ago and built it into a firm serving the auto, comp, and disability insurance industries.

This deal adds depth to Mitchell’s already-extensive utilization review/peer review offering, and adds cross-selling opportunities that should help the company compete with Examworks.

Strategically, the acquisition both broadens Mitchell’s non-bill review business and strengthens its offerings outside the auto casualty space, changes that lessen Mitchell’s reliance on auto and work comp review.  Given the long-term uncertainty about those businesses, the transaction makes sense – especially if the company focuses on disability, a space not subject to the impact of autonomous vehicles and the structural decline in work comp claim frequency.

One source indicates the price was in the 12x earnings range; that could not be independently verified.

In an unrelated transaction, TPA SUNZ bought case management firm Ascential Care in a deal announced on WorkCompWire this morning.  SUNZ sells high-deductible work comp plans to professional employer organizations (PEOs), staffing companies and larger employers.

I’d expect Ascential’s case management to be more tightly integrated with SUNZ’ claims management processes. Employers with loss-sensitive plans almost always buy into proactive, rapid use of clinical staff when claims arise. Getting case managers involved – when appropriate – can avoid problems and help patients feel like their employer is working to help them recover.

Ascential CEO Rich Leonardo is staying on and will continue to lead the business and SUNZ is investing in more staff to meet client needs.


For the umpteenth time time, workers’ comp is a very mature industry (as is auto).  Service companies looking to grow have to either:

  • take share from competitors;
  • buy other, similar businesses;
  • buy related businesses; or
  • expand into other markets.

Mitchell is growing by acquisition, adding more depth to its current medical management operation.  SUNZ is capturing more of the services delivered to current customers, thereby keeping those dollars inhouse.

What does this mean for you?

If you want to grow, see above. If that’s going to be hard to do, think about who may want to buy you.

Article source:Managed Care Matters


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