Chicago-based corporate benefits provider Maestro Health was acquired by French multinational insurance firm AXA Group.
The move by AXA, the world’s 42nd largest health care brand, appears to be its formal entry into the U.S. health care space. The deal, which was announced Jan. 22 and must go through regulatory approval, was completed for $155 million, according to published reports.
AXA’s acquisition of Maestro supports AXA’s payer-to-partner strategy in line with its “Ambition 2020” corporate initiative, according to a joint release.
“Not only is this the optimal step into the next phase of Maestro Health’s history, it’s also the ideal partnership to reinforce our all-in, continuum of care model — and ultimately transform health care as we know it today,” said Rob Butler, CEO and founder of Maestro Health. “With the scale and resources of one of the most recognizable brands in the world, we are well positioned to expedite our mission to lower health care costs, reduce complexity and empower the consumer more than ever before.”
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Once the acquisition is final, Maestro Health will maintain its identity, mission and team, while operating as a wholly owned subsidiary of AXA, Butler said.
“It was critical for us to maintain our culture, brand and innovative identity, yet find a true partner with the unique combination of AXA’s scale, like-mindedness and industry prowess — a synergy that can appeal to all of our current customers and channel partners,” Butler said, adding that AXA and Maestro Health share the same vision and passion. “We both believe there is great opportunity to positively impact the U.S. health care system. With the scale and resources of one of the most recognizable brands in the world, we are now well positioned to expedite our mission to lower healthcare costs, reduce complexity and empower the consumer more than ever before.”
Matt Straz, founder and CEO of HR software company Namely, believes there is more consolidation ahead for companies in HR technology. The Maestro deal could be the first of many deals in 2018, he said.
“Look no further than ADP’s acquisition of WorkMarket, also announced (Jan. 22),” said Straz, whose company was targeted for acquisition by Google in 2016. “Platforms that focus on these core areas — HR, payroll, and benefits — are most likely to be the acquirers — and with dozens of funded HR SaaS startups out there, we expect to see more acquisitions of focused point solutions.”
Butler agreed, adding that the industry is at a tipping point and employers and employees can no longer afford the rising costs of employee health and benefits.
“They are looking for flexible and innovative solutions to assist them,” Butler said. “Those companies that can adapt and execute on the new realities of the health care marketplace will win, and we believe we are well positioned to make an impact.”
Henry Albrecht, founder and CEO of Limeade, a Bellevue, Washington-based employee engagement company, shares Oak HC/FT as an investor with Maestro. He said they’re happy to see other true disruptors expand the scope of their impact.
“All of the cash-rich health care companies — SAP, Oracle, Workday, Google, Microsoft and other top-of-the-food-chain companies — need three things more than all else: innovation, growth and different ways of looking at markets,” Albrecht said. “The point solution providers are getting gobbled up by private equity companies and apex predators in their respective food chains. Every element of the Fortune 500 HR and benefits ecosystem will be reinvented in a consumer-centric way. This is just one more example of that.
“Maestro and other companies are making incredible progress on the transactional side of employee experience. A home with a global leader like AXA makes sense. On the more immersive, longitudinal and cultural side of the HR equation, Limeade and a handful of other employee engagement companies are also bringing unique innovations to the market.”
With AXA, Maestro Health customers will see enhancements in their experience and access to leading product offerings, according to the release. Additionally, Maestro Health will continue to focus on delivering new and improved solutions and services to the market, designed to further reduce health care costs and improve engagement for constituents across the entire continuum of care, the release stated.
“We are excited about this strategic investment. It provides an attractive opportunity to build our presence in the U.S. health care market with a new business model that has the potential of improving health care quality for millions of employees,” said Guillaume Borie, chief innovation officer at AXA. “Maestro Health has outstanding technology, assets and people, an agile organization and a close-knit culture, providing exciting prospects for our population health management strategy in the U.S. market and beyond.”
Maestro is a relatively young benefits enterprise company, having been founded by Butler in 2013. The company made its first big splash on the HR technology scene in 2016 at the HR Tech Conference in Chicago. Butler talked up Maestro’s culture at the event. His candor was refreshing in an industry where honesty is in short supply.
“People have plenty of options in this space,” he said. “Our culture is the difference maker. We’re going to make mistakes; everyone does. But we’re going to service our customers and exceed their expectations. Employers simply want the truth.”
Maestro Health currently serves more than 500 groups and 1 million lives on its maestroEDGE platform. Maestro counts more than 300 employees, it has also been recognized with some of the industry’s most prestigious awards and accolades, including Great Places to Work Institute’s “Great Place to Work,” and ChicagoInno’s “Coolest Companies.” It was also named bronze winners in the American Business Awards “Most Innovative Company of the Year” and “Tech Startup of the Year.”
“Joining forces with AXA will undeniably make us a better and stronger company not only for our customers, but also for our employees,” added Rob Butler. “People and culture are at the core of what we do, and I am thrilled about this next chapter as it is the perfect long-term scenario to keep the team together and accomplish our mission in the U.S. healthcare market and beyond.”
Triple Tree acted as the exclusive financial adviser to Maestro Health for this transaction.
Editor’s note: This story was updated Jan. 23 with new quotes.
Rick Bell is Workforce’s editorial director. Comment below or email email@example.com.