Revenue cycle management company R1 RCM plans to acquire patient financial engagement company VisitPay for $300 million in cash.
R1, a publicly-traded company, intends to fund the transaction with a combination of cash from its balance sheet and debt. The transaction provides a tax benefit valued at approximately $40 million, equating to an effective purchase price of approximately $260 million, the company said in a press release issued Tuesday.
The transaction is expected to close in the third quarter of 2021, subject to regulatory approval and other closing conditions.
The deal combined two major players in revenue cycle management.
VisitPay, a privately-held company based in Boise, Idaho, sells patient billing tools. Its clients include Intermountain Healthcare, Geisinger, Henry Ford Health System, Carilion Clinic, St. Luke's Health System and many other healthcare organizations.
The company was founded in 2020 and has raised $26 million from investors including Norwest Venture Partners, Inova Health System and Intermountain Healthcare.
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VisitPay's cloud-based platform aims to make the healthcare financial experience simple and efficient with consolidated digital statements across multiple visits, care settings and family members.
With these added capabilities, R1 will be poised to lead the healthcare payments market in price transparency, flexible and personalized payment options, tailored communications and big data analytics, according to the company.
VisitPay also developed proprietary analytics, derived from a decade’s worth of curated healthcare transaction data, designed to deliver consistent and compliant financing options. The company's payment platform integrates across all major acute and ambulatory billing systems.
Last year, R1 bought health IT giant Cerner's revenue cycle business, RevWorks, for $30 million. The company also paid $190 million to acquire SCI Solutions, a provider of SaaS-based scheduling and patient access solutions.
R1 executives said VisitPay’s financial engagement technology complements R1’s intelligent patient access technology, which unifies key patient engagement touchpoints, including orders, scheduling, clearance, arrivals, and now with the acquisition, billing and payments.
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“VisitPay’s offering adds to R1’s intelligent patient access platform and underscores our drive to empower providers with a comprehensive technology solution to deliver markedly higher satisfaction and better financial outcomes,” said Joe Flanagan, president and chief executive officer of R1 in a statement.
Centerview Partners LLC acted as financial advisor and Winston & Strawn LLP acted as legal advisor to R1. Allen & Company LLC acted as financial advisor and Stoel Rives LLP acted as legal advisor to VisitPay.
The transaction is expected to close in the third quarter of 2021, subject to regulatory approval and other closing conditions.
R1 posted $343 million in revenue in the first quarter of 2021, up $22.1 million or 6.9% compared to the same period last year. The company also reported GAAP net income of $25.8 million, up $7.6 million or 41.8% compared to the same period last year.
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May 05, 2021 at 11:02PM
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R1 RCM to buy digital payment solutions company VisitPay for $300M - FierceHealthcare
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