11 billion, the first big acquisition this year

Recently, Reuters reported that private equity firm KKR&Co has agreed to buy a stake in Cotiviti from investment management firm Veritas Capital. The transaction is expected to close in the second quarter of 2024, and KKR and Veritas will have equal ownership of Cotiviti, i.e. 50% and 50%, upon closing.

Financial details of the deal were not provided. For reference, Cotiviti is valued at between $10 billion and $11 billion. If the two companies reach an agreement, the deal's potential valuation would make it one of the largest U.S. private equity deals announced so far this year.

A source told Reuters that KKR has commissioned a bank-lending consortium to finance the deal, a rare victory for the traditional banking sector, which has been ceding M&A financing market share to private lenders. Another source said jpmorgan is leading a group of banks to help finance the Cotiviti deal with a $5 billion loan.

Cotiviti is a leading provider of payment accuracy and analytics-driven solutions focused primarily on the healthcare industry, with the aim of enabling healthcare organizations to deliver better care at lower cost through advanced technology and data analytics. In 2018, Verscend Technology, a unit of Veritas Capital, acquired the company for $4.16 billion in cash.

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The Cotiviti Company

As a leading global healthcare data analytics company, Cotiviti is a leading provider of payment accuracy and analytics-driven solutions focused on the healthcare industry, aiming to enable healthcare organizations to provide better diagnosis and treatment at a lower cost through advanced technology and data analysis. It has partnered with more than 180 healthcare payers, including the top 25 in the U.S., to deliver higher performance payment accuracy, risk adjustment, quality improvement, network and clinical analytics, and consumer engagement programs.

The company collects billions of clinical and financial data points, analyzes them, and helps its customers discover ways to improve efficiency and quality. In addition, Cotiviti provides audit and recovery services for the retail industry, including the top 10 U.S. retailers, to improve efficiency and maximize profitability.

Veritas Capital acquires Cotiviti

In June 2018, Verscend Technology, a unit of Veritas Capital, announced it had agreed to acquire healthcare data company Cotiviti Holdings for $4.9 billion in cash. On August 27, 2018, Verscend announced the completion of the acquisition of Cotiviti.

Under the agreement, Cotiviti shareholders will receive merger consideration of $44.75 in cash for each common share held, resulting in an enterprise value of approximately $4.9 billion. Cotiviti's Board of directors unanimously approved the transaction. Dr. Emad Rizk, President and CEO of Verscend, retains these titles for the combined business, and the combined private company plans to operate under the name Cotiviti.

Dr. Emad Rizk serves as President and Chief Executive Officer

Dr. Emad Rizk currently serves as Chairman, President and Chief Executive Officer of Cotiviti. With extensive experience working with payers, hospital systems, governments, physicians, and pharmaceutical companies, Dr. Rizk brings focus and rigor to Cotiviti's healthcare analytics and technology offerings, while laying the foundation for significant growth for the organization. Notably, under Dr. Rizk's leadership, when he was CEO of Verscend Technologies, he completed the $4.9 billion acquisition of Cotiviti Holdings, which was the largest payer analytics acquisition of 2018.

Prior to joining Cotiviti, Dr. Rizk served as President and Chief Executive Officer of Accretive Health (now R1 RCM) and as a member of its Board of directors, where he completed the restatement, restructuring and repositioning of the company's products and led it to quadruple its profitability during his tenure.

He has been named one of the "50 Most Influential Physician Executives in America" and one of the "100 Most Influential People in Healthcare" by Modern Healthcare. In addition, Managed Healthcare Executive named him a "Top 25 Leader in Disease Management."

It's valued at $11 billion

A year after joining Cotiviti, Emad Rizk led the company to a $30 million equity funding round and subsequently led Cotiviti's acquisition of healthcare data analytics company RowdMap for $70 million to further enrich and optimize Cotiviti's payment accuracy analytics tools.

Under Emad Rizk's leadership, Cotiviti has grown to save its customers $8 billion a year in health care costs in payment accuracy alone, and the company has been valued at between $10 billion and $11 billion.

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Double sell-off

In fact, this is not the first time Veritas Capital has tried to sell a stake in Cotiviti; in February, Bloomberg News reported, citing people familiar with the matter. The Carlyle Group is in talks to acquire health care technology company Cotiviti from Veritas Capital for nearly $15 billion, including debt.

To that end, Carlyle is working with private credit firms to raise about $5.5 billion for a potential deal. But then, in April, news broke that a deal between Veritas Capital and Carlyle Group had fallen through.

KKR Group medical layout

It is reported that as one of the world's largest alternative asset managers, KKR Group was founded in 1976, assets under management of about 518.5 billion US dollars, business across the world's major countries, covering private equity investment credit, infrastructure, real estate, capital markets and hedge funds six sectors.

In May, KKR-backed Envision Healthcare Corp (EVHC) and some of its wholly-owned subsidiaries filed for bankruptcy protection. EVHC, formerly known as EVHC, is one of the largest ambulatory surgery operating companies in the United States, covering more than 1,800 clinical departments and more than 25,200 hired or affiliated physician specialists at medical facilities in 45 states and the District of Columbia.

Envision Healthcare Bankruptcy

In 2018, KKR will acquire all outstanding shares of Envision Healthcare Corp (EVHC) for $46 per share in an all-cash transaction valued at $5.57 billion, with the assumption of Envision Healthcare debt bringing the total transaction to $9.9 billion. The bankruptcy of Envision Healthcare Corp also wiped out one of KKR's major healthcare investments.

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Veritas Capital's healthcare layout

Veritas Capital is an investment firm with more than two decades of experience and more than $40 billion in assets under management, primarily investing in companies that provide critical products and services, primarily technology or technology-enabled solutions, to government and commercial clients around the world. Using technology to make a positive impact in critical areas such as healthcare, education and national security is at the heart of Veritas.

With the rapid development of the global information industry, with its inherent advantages of software information technology and financial strength, Veritas has gained ground in many industries and completed nearly 100 acquisitions in less than 20 years. On the medical track, Veritas Capital focuses on medical technology, Analytics and engagement solutions, and has invested in the acquisition of Truven Health Analytics and Verscend, which has laid a solid foundation for the deep development of the medical information industry.

Acquisition of GE's medical software division

In July 2018, the same year that the Cotiviti deal was completed, Veritas Capital completed the $1 billion acquisition of GE's Value-Based Care Division, The deal follows the "corporate divestiture" pattern of Veritas' previous investments in healthcare technology - including investments by Truven Health Analytics and Verscend.

Following the closing of the transaction, GE Healthcare Software will operate as an independent company, with one of its subsidiaries responsible for operating its financial management (revenue cycle, center business), outpatient management (centralized practice Solutions) and people management (formerly API Healthcare).

Acquisition of HMS Holdings Corp

In April 2021, Gainwell, a unit of Veritas Capital, completed the acquisition of HMS Holdings Corp.(" HMS "), a leading provider of medical technology, analytics and engagement solutions. As part of the transaction, Gainwell acquired HMS's capabilities with a focus on the Medicaid marketplace, including providing benefit Coordination (COB) and payment integrity solutions to states, and COB solutions to Medicaid managed care organizations. Cotiviti acquires HMS payment, integrity, and population health management capabilities from Gainwell, with a focus on health plans and the federal marketplace.

At the moment, Veritas Capital's Healthcare portfolio includes API Healthcare, athenahealth, Coronis Health, Inc., Cotiviti Corporation, Syneos Health, Truven Health Analytics Inc. Let's wait.

API Healthcare.

API Healthcare. During Veritas' ownership, API provided healthcare specific integration software that enabled seamless workforce management. The company's comprehensive suite of solutions includes real-time, data-driven software products that help healthcare providers use analytics to meet patient needs and drive better clinical, financial and operational outcomes.

athenahealth

athenahealth offers an integrated suite of web-based electronic medical records, revenue cycle management, patient management, care coordination, and population health services that enable healthcare providers to effectively manage administrative tasks and focus on patient care, resulting in increased efficiency and improved clinical and financial outcomes. AthenaHealth's portfolio of cloud-based technology support solutions is an integral part of care services in the U.S. healthcare provider ecosystem.

Coronis Health

Coronis Health is a scaled revenue cycle management platform that provides end-to-end technology support solutions to a variety of healthcare providers across the United States.

Syneos Health

Syneos Health is a leading provider of outsourced clinical research and commercialization services to pharmaceutical and biotechnology customers. The company's services are deeply rooted in the global pharmaceutical value chain, helping clients conduct clinical trials during drug development and bring drugs to market after FDA approval. Syneos Health serves 25 of the world's largest pharmaceutical companies and many of the most innovative biotechnology companies.

Truven Health Analytics Inc.

While owned by Veritas, Truven provided healthcare data and Analytics solutions to key components of the healthcare system, including government agencies, employers, Health plans, hospitals, clinicians and pharmaceutical companies. Clients use the company's analytics to reduce costs, manage risk, improve clinical and operational performance, and increase the effectiveness, coordination, and transparency of healthcare delivery.

As the world's leading medical technology company, the acquisition amount of more than 10 billion dollars is worthy of public attention. Specific acquisition news, we will continue to pay attention to update.