(Bloomberg) — R1 RCM Inc. agreed to buy health-care technology provider Cloudmed in an all-stock deal valuing the target at $4.1 billion, including debt.
R1 is buying the Atlanta-based company from private equity firm New Mountain Capital, according to a statement Monday.
R1 fell about 6% to $21.96 at 12:56 p.m. in New York trading Monday, giving the Salt Lake City-based company a market value of about $6.1 billion.
The deal gives R1 RCM a foothold with some of the 50 largest health-care systems, many of whom it didn’t yet have a relationship with. Cloudmed’s customers include 47 of 50 health care systems. R1 RCM had contracts with two of those.
R1 RCM and Cloudmed help health-care providers get paid for the services they offer. Demand for services like theirs has increased as hospitals increasingly watch their bottom lines, especially after the pandemic caused many patients to delay elective procedures.
“This transaction accelerates our strategy to build the most scalable, flexible, and integrated platform for the revenue cycle and consumer engagement in healthcare,” Joe Flanagan, president and chief executive officer of R1, said in a statement.
The deal will be accretive to to earnings per share in the first year after closing. R1 shareholders will own 70% of the combined company.
New Mountain invested in Cloudmed in 2017, when it was known as Revint Solutions, according to New Mountain’s website.
Centerview Partners and JPMorgan Chase & Co. advised R1 on the deal while Barclays Plc advised Cloudmed.
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