BX Blackstone Inc

By Miriam Gottfried 

Blackstone Group Inc. is buying a majority stake in a health-care software company -- the latest example of its strategy to invest in fast-growing firms.

The private-equity giant is buying a stake in HealthEdge, which makes administrative software for health insurers, Blackstone plans to announce later Monday. The companies don't plan to disclose the financial terms of the deal, but a person familiar with the matter said it values HealthEdge at around $700 million, including debt.

The vast majority of Blackstone's investment will come in the form of equity, the person said, aiding the firm's ability to get the deal done in the face of credit-market turmoil related to uncertainty around the coronavirus outbreak.

With offices in Burlington, Mass., and Powell, Ohio, HealthEdge makes cloud-based software that aims to help health insurers administer benefits, configure plans, manage providers and enroll participants. Last month, the company said its revenue grew by over 30% in 2019 as its customer base grew by 25%.

The deal is the first in the health-care sector to be done by Blackstone's growth-equity team. The firm hired Jon Korngold last year from General Atlantic to start the business. Ram Jagannath, previously a health-care investor at Carlyle Group Inc., led the HealthEdge deal.

Investing in fast-growing companies has been one of Blackstone President Jonathan Gray's key strategies for navigating an expensive market.

In November, the firm struck a deal to take a majority stake in MagicLab, the owner of dating app Bumble. And last month Ultimate Software, a fast-growing workplace software maker, said it would merge with Kronos Inc., another workplace software-maker. Blackstone had invested in both companies, alongside private-equity firm Hellman & Friedman.

Write to Miriam Gottfried at Miriam.Gottfried@wsj.com

(END) Dow Jones Newswires

March 09, 2020 12:44 ET (16:44 GMT)

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