Please ensure Javascript is enabled for purposes of website accessibility

Private-Equity Giant Blackstone Buys Stake in Healthcare Software Company HealthEdge

By Mark Prvulovic - Mar 9, 2020 at 9:16PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Healthcare companies are becoming attractive buyout targets for many investors.

One of the largest private equity and alternative investment firms in the world just bought a majority stake of a promising healthcare software company. News broke on Monday afternoon that Blackstone Group (BX) will become the majority owner of HealthEdge, a healthcare software developer for health insurers.

HealthEdge develops a cloud-based software platform that helps health insurers keep track of their plans, enroll participants, and handle other administrative tasks. The company's revenue grew by 30% in 2019 compared with last year, while its customer base has risen by 25%. Although the full details of the transaction weren't disclosed, one person close to the matter said this deal puts HealthEdge's value at around $700 million.

Business people in a room shaking hands over a conference table.

Image source: Getty Images.

While Blackstone has made deals in the tech sector before, healthcare is an area that the private-equity giant has less experience in. Other recent Blackstone acquisitions include a deal in November to acquire a majority stake in MagicLab, the maker of dating app Bumble, for around $3 billion.

Are further healthcare investments on the horizon?

Back in January, news broke that Blackstone had raised three-quarters of the $4.6 billion target it set for a new life science sector investment fund. This would be one of the largest funds in this sector, a testament to the appeal of the high-growth, high-risk nature of the healthcare and biotech markets.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The Blackstone Group L.P. Stock Quote
The Blackstone Group L.P.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.