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Avizent's purchase last week of F.A. Richard & Associates Inc. shows that consolidation among independent third-party administrators is continuing and narrowing employers' choices--particularly for employers with nationwide operations, sources said.
Dublin, Ohio-based TPA and risk management services provider Avizent, the marketing name of Frank Gates Service Co./Attenta, did not disclose terms of its purchase of Mandeville, La.-based FARA, which also provides several property/casualty services including workers compensation claims administration and managed-care products.
The combined entity is expected to produce $135 million in revenue in 2011, said Thomas W. Watson, Avizent's president and CEO. About 50% of that revenue should flow from "pure" claims management services for various property/casualty lines with approximately three-quarters of that coming from workers comp business.
Avizent, which has 40 offices, and FARA target primarily middle-market accounts, although Avizent also manages claims for "some of the largest companies in the U.S.," Mr. Watson said.
FARA, with 19 U.S. offices, also has large risk management accounts, said Joe Picone, chief claims officer of Willis North America's strategic outcomes practice in Glen Allen, Va.
Last week's deal is smaller than the December $278 million cash acquisition of Specialty Risk Services L.L.C. by Sedgwick Claims Management Services Inc., several sources said. But it is "fairly comparable" to Gallagher Bassett Services Inc.'s purchase in October of GAB Robins North...