Data-driven health solutions provider, Verscend Technologies acquires payment analytics firm, Cotiviti, in an attempt leave a greater footprint on the health IT market.
Verscend announced the $4.9 billion deal in June, with Cotiviti shareholders only agreeing to it on August 24.
Under the terms of the agreement Cotiviti shareholders will receive $44.75 for each share of Cotiviti common stock. Verscend will assume all of Cotiviti’s debt.
The combined company will trade under the Cotiviti name.
The new Cotiviti seeks to “operate as a healthcare information technology company able to apply multidimensional analytic insights, deep market expertise, and high-performance services to help its clients reshape the economics of healthcare,” a statement following the acquisition said.
Verscend’s president and CEO, Emad Rizk, who will head the new Cotiviti said: “With our new capabilities across payment, quality, risk and the combination of clinical and financial data, Cotiviti will be unmatched in its ability to create differentiated value for its clients.”
Rizk said the two companies were customer-driven innovators sharing a vision “to help our clients improve healthcare affordability, reduce waste, and identify the best path to better outcomes.”
Cotiviti estimates that nearly $1 trillion is wasted annually on healthcare spending across the United States, with $600 billion of that being attributed to unnecessary care and inappropriate payments.
Veritas Capital’s Managing Partner and CEO, Ramzi Musallam said:
“We expect that the two companies’ complementary datasets, analytical capabilities, and industry expertise will accelerate forward momentum for the new Cotiviti through smarter, faster solutions that address rising costs, eliminate waste, and speed quality improvement for the healthcare industry overall.”
Verscend Technologies, a portfolio company of Veritas Capital, has carved its niche in data driven health solutions, while Cotiviti was described as a “leading provider of payment accuracy and analytics-driven solutions focused primarily on the healthcare industry.”
Recently, Veritas Capital, Verscend’s parent company, finalised the acquisition of GE Healthcare’s Value-Based Care Division for $1.05 billion and has previously invested in Truven Health Analytics.
The rising costs of care coupled with the sheer numbers of patients who need it is beckoning the digital transformation of healthcare. Reinventing the trillion dollar healthcare industry is a major business opportunity that is not to be missed.
Just like the big 4 tech companies are looking to emerge as leaders in healthcare innovation by collaborating with healthcare startups, we can expect partnerships and acquisitions to become the new norm as companies strive to gain more healthcare market share.
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