How Much is Lionheart Capital Really Worth?

The story of Lionheart Capital begins with John Ruiz and Ophir Sternberg (real estate developer and founder of Lionheart). Sternberg joined forces with hedge fund Elliott Management, turning Miami Heart Institute into a spate of luxury residences. This past May, Ruiz and Sternberg bought Cigarette Racing Team together.

California News Times details that as of August 2020, Lionheart Capital raised upward of $230 million. They then set a deadline of 1 ½ years to find appropriate deals. Sternberg later merged with MSP Recovery—a business founded by Miami Lawyer and TV personality, John Ruiz. The business model involves buying Medicaid and Medicare cases from the government, and then determining whether some other party (insurers, employers, etc.) should have covered those costs.

The merger deal for Lionheart and MSP Recovery is valued at $32.6 billion. Normally, a deal of this size would be big news, but not this time. The words being used by involved parties include ‘terribly overvalued’ and ‘stunning.’ The valuation was based on 10.5 times the expected revenue for 2023, based on existing claims. MSP Recovery, in a speech presented to investors, said that its rating was on par with Blackstone, Apollo, KKR, and other private equity leaders.

Meanwhile, John Ruiz told Financial Times that these statements were not based on the model he helped build. The company could achieve its projected results since as much as $1.6 trillion in annual Medicaid and Medicare overpayments could be collected.

Since the agreement was signed in March, three Lionheart Acquisition board members have resigned from the company. COO Trevor Barran also resigned just prior to the announcement of the deal.

Ruiz’ fees are $70 million out of the $230 million. He claims these charges are reasonable because so many people have worked on the deal for so long.