Proving the sales rumors true, Englewood-based IT healthcare company Trizetto has agreed to be acquired for $2.7 billion by Cognizant, a business consulting and IT infrastructure company. TriZetto manages and attempts to streamline the increasingly complex network of insurance claims and billing that healthcare providers are forced to deal with. Cognizant also has a healthcare IT division, but makes most of its money in consulting, IT infrastructure and business process outsourcing.
Cognizant sees its acquisition of TriZetto as a means to capture value in a rapidly changing sector and create a massive healthcare IT juggernaut. Cognizant said combined the two companies will total over $3 billion in healthcare revenue, will service 245,000 healthcare providers and 350 healthcare payers. Healthcare is 26 percent of Cognizant’s current revenue. TriZetto’s 3,700 employees will join Cognizant’s healthcare operations.
"Healthcare is undergoing structural shifts due to reform, cost pressure and shifting responsibilities between payers and providers. This creates a significant growth opportunity, which TriZetto will help us capture," said Francisco D'Souza, CEO of Cognizant, in a statement. "We are excited that the integrated portfolio of capabilities across technology and operations will uniquely position us to help clients drive higher levels of operational efficiency, while re-imagining care for the future.”
The $2.7 billion sale will be a healthy payday for private equity firm Apax, which bought the company in 2008 for $1.4 billion. Before that TriZetto was a publically traded company that IPO’d right around the internet bubble in 1999.
The two companies said they have worked together before serving healthcare clients making the sale a natural fit. The purchase “represents a great opportunity to integrate services across our three horizons—traditional IT services; high-growth businesses such as management consulting, business process services and IT infrastructure services; and emerging delivery models—and provide even greater value to our clients," said Gordon Coburn, president of Cognizant.
Cognizant intends to finance the purchase of TriZetto through cash and debt. It has secured $1 billion in financing to support the buy.
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