Mergers & Acquisitions

Cigna agrees to buy Express Scripts based in St. Louis, MO in a $67B deal including $15B in debt

The last of independent PBMs is history. Most of the large payers already own their own PBM. So the deal is not a surprise.  Express Scripts lost its biggest client, Anthem last year which went ahead and set up its own PBM. Express Scripts has over $100B in revenue and EBITDA of $7.2B. The transaction represents a 31% premium. 

Summit sells its portfolio company, Integrated DNA Technologies based in Skokie, IL, to Danaher Corporation for $2B

IDT is a genomic-focused life science company. It provides high value consumables for genomics application in molecular biology and next generation sequencing synthetic biology, gene editing and molecular diagnostics. Customers include pharma, biotech and academic institutions. It has been a good few weeks for Summit with two large billion dollar exits which  includes ABILITY Network.

Private equity group Platinum Equity is buying Johnson & Johnson’s glucose monitoring business, LifeScan, based in Milpitas, CA for $2.1 billion

J&J put up their entire glucose monitoring business for sale last year. Rumors were that Chinese companies were the top bidders.  But Los Angeles-based Platinum Equity has now emerged as the front-runner.

Platinum has had a history of buying troubled businesses and turning them around. To our knowledge LifeScan is not a troubled asset. Glucose monitoring is a hugely competitive market and this is a pricey deal.

ABILITY Network, based in Minneapolis, MA is picked up by Inovalon for $1.2B in cash and restricted stock

Inovalon is a leader in value based analytics with $450M in revenue. ABILITY is one of the largest RCM players which primarily covers long term care facilities, hospice and nursing home markets. The company has more than 44,000 provider facilities as clients. ABILITY has grown impressively through several acquisitions both under Bain Ventures’ and Summit Partners’ ownership. The company had $72M in EBITDA, equating to a multiple of 16.6x purchase price.

The companies tout this as a vertical integration where the information residing in ABILITY’s transactional “traffic” can be combined with Inovalon’s strong analytical skills. Time will tell. The deal is expected to be accretive out of the gate which is a good thing.

New Mountain Capital-backed Revint Solutions Acquires Tamroc Partners-backed Naveos based in Sterling, VA  Naveos is a market leader in specialized government reimbursement technology and services for healthcare providers. This includes SSI Ratio Management, 340B program eligibility and Medicaid member management. Revint aims to deepen its technology used in revenue integrity solutions particularly focused on complex reimbursements..

R1 acquires Intermedix’s, healthcare RCM division, based in Fort Lauderdale, FL for $460M

R1 (the former troubled publicly-held Accretive Health) is one of the largest providers of RCM for hospitals. Ascension, country’s largest catholic health system, is an investor and its biggest client. Intermedix which has been in private hands (owned by Parthenon since 2006), is the largest ER RCM player. The combination will be a significant player in the RCM industry. Intermedix will receive access to all the ER operations of R1 and R1, in turn, will be able to tap into the 15,000 healthcare providers that are currently being served by Intermedix.

The market certainly likes this deal. R1’s stock has jumped from $3.51 six months ago to $7.40 at the time of this writing. 

New Mountain Capital-backed Equian Acquires Woburn, MA-based  OmniClaim

Equian, is a leader in end-to-end payment integrity solutions. OmniCliam, in turn is a top notch player in post-payment provider audit. This is a good bulk up acquisition for Equian who has aspiration of becoming a larger end-to-end provider with advanced analytics to boot.

Equian manages over $300B in claims data annually assisting clients by avoiding, identifying, pricing, analyzing clinical codes, and ultimately recovering inaccurate transactions. Workers comp, P&C insurance markets are the main activities of the company. 

Cognizant buys RCM player Bolder Healthcare Solutions based in Louisville, KY

As one of the largest healthcare IT and services companies, Cognizant has traditionally focused on the payer market. Bolder is an RCM player catering to hospitals, physician practices and other specialist healthcare organizations. The acquisition should not only help Cognizant to strengthen its consulting practice, but become a meaningful platform for the company in the provider sector.

Genstar- backed Accruent acquires Connectiv based in La Jolla, CA for biomedical and device asset management

This is Accruent’s seventh acquisition in two years. Connective has a cloud based solution which helps clinical engineering departments to automate tasks such as biomedical asset management, compliance management, purchasing support automation and parts and inventory management. Many believe that medical devices are the next frontier for cyber attacks and ransomware. This is a smart move by Accruent.

RCM vendor, The SSI Group buys Informatics Corporation of America based in Nashville, TN

CA is an interoperability player which can help SSI to bring administrative and clinical functions closer together. Value based reimbursements would not be possible without the comingling of clinical and financial data. 

In our opinion, vendors that are solely focusing on administrative/financial functions will slowly become irrelevant in 2-4 years.

HIMSS acquires Healthbox, based in Chicago, Il to get into the innovation consulting game

The acquisition will enable HIMSS to offer hospitals guidance about bringing innovation into heir systems and learning how to invest in and work with start ups.  This is the second acquisition by HIMSS. Last year the organization bought Health 2.0, the leading conference for next generation healthcare