R1 RCM to be Acquired by TowerBrook and CD&R for $8.9 Billion
R1 RCM Inc. (NASDAQ: RCM), a leading healthcare technology solutions provider, has announced its acquisition by TowerBrook Capital Partners and Clayton, Dubilier & Rice (CD&R) in an all-cash transaction valued at $8.9 billion. Stockholders will receive $14.30 per share, representing a 29% premium to the company's unaffected closing price on February 23, 2024. The deal, unanimously approved by a special committee of R1's Board, is expected to close by year-end, subject to stockholder and regulatory approvals. Upon completion, R1 will become a private company, delisting from Nasdaq.
TowerBrook, currently owning about 36% of R1's outstanding shares, will partner with CD&R to acquire the remaining stock. The acquisition aims to further invest in R1's core operations and build its leadership in intelligent automation and GAI in revenue management for healthcare providers.
R1 RCM Inc. (NASDAQ: RCM), un fornitore leader di soluzioni tecnologiche per la salute, ha annunciato di essere stata acquisita da TowerBrook Capital Partners e Clayton, Dubilier & Rice (CD&R) in un trasazione in contante del valore di 8,9 miliardi di dollari. Gli azionisti riceveranno 14,30 dollari per azione, che rappresenta un premio del 29% rispetto al prezzo di chiusura non influenzato della società del 23 febbraio 2024. L'accordo, approvato all'unanimità da un comitato speciale del Consiglio di R1, dovrebbe chiudersi entro la fine dell'anno, soggetto all'approvazione degli azionisti e delle autorità di regolamentazione. Al termine, R1 diventerà una società privata, disattivando il proprio status da Nasdaq.
TowerBrook, attualmente proprietario di circa il 36% delle azioni in circolazione di R1, collaborerà con CD&R per acquisire le rimanenti azioni. L'acquisizione mira a investire ulteriormente nelle operazioni core di R1 e costruire la sua leadership nell'automazione intelligente e nel GAI nella gestione delle entrate per i fornitori di servizi sanitari.
R1 RCM Inc. (NASDAQ: RCM), un proveedor líder de soluciones tecnológicas de atención médica, ha anunciado su adquisición por TowerBrook Capital Partners y Clayton, Dubilier & Rice (CD&R) en una transacción en efectivo valorada en 8.9 mil millones de dólares. Los accionistas recibirán 14.30 dólares por acción, lo que representa una prima del 29% sobre el precio de cierre no afectado de la compañía del 23 de febrero de 2024. El acuerdo, aprobado unánimemente por un comité especial de la Junta de R1, se espera que se cierre a finales de año, sujeto a la aprobación de los accionistas y de las regulaciones. Al completarse, R1 se convertirá en una empresa privada, perdiendo su cotización en Nasdaq.
TowerBrook, que actualmente posee alrededor del 36% de las acciones en circulación de R1, se asociará con CD&R para adquirir el resto de las acciones. La adquisición tiene como objetivo invertir aún más en las operaciones centrales de R1 y construir su liderazgo en la automatización inteligente y GAI en la gestión de ingresos para los proveedores de atención médica.
R1 RCM Inc. (NASDAQ: RCM)은 선도적인 헬스케어 기술 솔루션 제공업체로, TowerBrook Capital Partners와 Clayton, Dubilier & Rice (CD&R)에 의해 89억 달러 상당의 현금 거래로 인수된 것을 발표했습니다. 주주들은 주당 14.30달러를 받게 되며, 이는 2024년 2월 23일 회사의 영향을 받지 않은 종가에 비해 29% 프리미엄에 해당합니다. 이 거래는 R1의 이사회 특별위원회가 만장일치로 승인하였으며, 주주 및 규제 기관의 승인을 조건으로 연말까지 완료될 것으로 예상됩니다. 완료 시 R1은 상장 폐지되어 비상장 회사가 됩니다.
현재 R1의 주식 약 36%를 보유하고 있는 TowerBrook은 CD&R과 협력하여 나머지 주식을 인수할 것입니다. 이 인수는 R1의 핵심 운영에 추가 투자하고 헬스케어 제공업체를 위한 수익 관리에서 지능형 자동화 및 GAI의 리더십을 구축하는 것을 목표로 하고 있습니다.
R1 RCM Inc. (NASDAQ: RCM), un fournisseur de solutions technologiques de santé de premier plan, a annoncé son acquisition par TowerBrook Capital Partners et Clayton, Dubilier & Rice (CD&R) dans une transaction entièrement en espèces d'une valeur de 8,9 milliards de dollars. Les actionnaires recevront 14,30 dollars par action, ce qui représente une prime de 29% par rapport au prix de clôture non affecté de l'entreprise au 23 février 2024. L'accord, approuvé à l'unanimité par un comité spécial du Conseil d'administration de R1, devrait être finalisé d'ici la fin de l'année, sous réserve de l'approbation des actionnaires et des régulateurs. Une fois terminé, R1 deviendra une entreprise privée, se retirant de Nasdaq.
TowerBrook, possédant actuellement environ 36% des actions en circulation de R1, s'associera à CD&R pour acquérir le reste des actions. L'acquisition vise à investir davantage dans les opérations centrales de R1 et à renforcer sa position de leader en automatisation intelligente et en GAI dans la gestion des revenus pour les prestataires de soins de santé.
R1 RCM Inc. (NASDAQ: RCM), ein führender Anbieter von Gesundheitstechnologielösungen, hat seine Übernahme durch TowerBrook Capital Partners und Clayton, Dubilier & Rice (CD&R) in einer Bartransaktion im Wert von 8,9 Milliarden US-Dollar angekündigt. Die Aktionäre erhalten 14,30 US-Dollar pro Aktie, was einen 29% Aufschlag auf den nicht betroffenen Schlusskurs des Unternehmens am 23. Februar 2024 darstellt. Der Deal, der einstimmig von einem Sonderausschuss des Boards von R1 genehmigt wurde, soll bis Ende des Jahres abgeschlossen werden, vorbehaltlich der Zustimmung der Aktionäre und der Regulierungsbehörden. Nach Abschluss wird R1 ein privates Unternehmen und wird von Nasdaq delisted.
TowerBrook, das derzeit etwa 36% der ausstehenden Aktien von R1 hält, wird mit CD&R zusammenarbeiten, um die restlichen Aktien zu erwerben. Ziel der Übernahme ist es, weiter in die Kernoperationen von R1 zu investieren und die Führung in intelligenter Automatisierung und GAI im Revenue Management für Gesundheitsdienstleister auszubauen.
- All-cash transaction valued at $8.9 billion, providing immediate value to shareholders
- 29% premium offered to stockholders based on the unaffected closing price
- Potential for accelerated growth and innovation as a private company
- Continued investment in core operations and technology development promised by acquirers
- Delisting from Nasdaq, reducing liquidity for current shareholders
- Potential job uncertainties during transition to private ownership
- Loss of public market access for future capital raising
Insights
This acquisition of R1 RCM by TowerBrook and CD&R is a significant development in the healthcare technology sector. The
The transaction's structure is noteworthy. TowerBrook, already owning
Financially, the deal appears solid for current shareholders, offering a significant premium in a challenging market. However, it's important to consider the broader implications. The privatization could potentially limit future upside for investors who believe in R1's long-term growth prospects in the rapidly evolving healthcare tech space.
The involvement of multiple financial advisors and the unanimous approval by the special committee suggest a thorough vetting process, which should provide some reassurance to shareholders about the deal's fairness. However, as always, investors should carefully review the full terms and conditions before making any decisions.
R1 RCM's acquisition marks a pivotal moment in the healthcare revenue cycle management (RCM) industry. As a leader in technology-driven solutions for healthcare providers, R1's platform plays a important role in improving financial performance and patient experience - two critical aspects in today's healthcare landscape.
The emphasis on intelligent automation and GAI (Generative AI) in revenue management is particularly intriguing. This focus aligns with the broader trend of AI integration in healthcare operations, potentially revolutionizing how providers manage their financial processes. The private equity backing could accelerate R1's innovation in this area, free from the short-term pressures of the public market.
However, the transition to private ownership may have implications for R1's clients. While the company assures continued investment in core operations, healthcare providers relying on R1's services should monitor any potential changes in service delivery or pricing structures post-acquisition.
The deal also reflects the growing interest of private equity in healthcare technology. This trend could lead to more consolidation in the RCM space, potentially reducing options for healthcare providers but also driving further innovation and efficiency in the sector.
The acquisition of R1 RCM by TowerBrook and CD&R is a testament to the growing importance of technology-driven solutions in healthcare revenue management. This deal could potentially reshape the competitive landscape of the healthcare technology market.
R1's position as a leading provider of automation solutions for healthcare providers has likely been a key factor in attracting this investment. The company's focus on intelligent automation and GAI in revenue management aligns with the industry's push towards more efficient, technology-driven operations.
From a market perspective, this acquisition could trigger a ripple effect. Competitors in the healthcare RCM space might feel pressure to seek similar partnerships or investments to keep pace with R1's potential for accelerated growth and innovation under private ownership.
Moreover, this deal might signal increased M&A activity in the healthcare technology sector. Other players in the market, especially those with strong technological capabilities, could become attractive targets for private equity firms looking to capitalize on the digital transformation of healthcare.
It's also worth noting the timing of this acquisition, coming as healthcare providers continue to grapple with financial challenges post-pandemic. R1's solutions, potentially enhanced by this new investment, could see increased demand as providers seek to optimize their financial performance in a challenging economic environment.
Stockholders to Receive
MURRAY, Utah, Aug. 01, 2024 (GLOBE NEWSWIRE) -- R1 RCM Inc. (NASDAQ: RCM) (“R1” or the “Company”), a leading provider of technology-driven solutions that transform the patient experience and financial performance of healthcare providers, today announced that it has entered into a definitive agreement to be acquired by investment funds affiliated with TowerBrook Capital Partners and Clayton, Dubilier & Rice (“CD&R”), in an all-cash transaction with an enterprise value of approximately
The consideration of
The transaction has been unanimously approved by a special committee of the R1 Board of Directors comprised solely of independent directors (the “Special Committee”), which, as previously announced on March 11, 2024, was formed to evaluate strategic alternatives. Transaction negotiations were led by the Special Committee, advised by independent legal and financial advisors, and following the recommendation of the Special Committee, R1’s Board approved the transaction.
“TowerBrook has been an outstanding long-term investor and partner to R1 and shares our vision of being the automation platform of choice for the provider industry,” said Lee Rivas, R1’s CEO. “Our agreement reflects TowerBrook’s and CD&R’s confidence in our team and the unmatched scale, technology and value we provide. We believe the transaction represents the best path forward for R1 at an attractive valuation to our stockholders that reflects the Company’s position as a leading provider of technology-driven solutions for its customers.”
Ian Sacks, Managing Director at TowerBrook, stated, “As a long-term, responsible investor in R1, TowerBrook has supported the development of R1 as a leader in healthcare provider revenue management since 2016. Together with CD&R, we look forward to continuing to invest in the Company’s core operations to drive customer performance and value while also continuing to build R1 as a leader in intelligent automation and in the use of GAI in revenue management.”
“R1 is a trusted partner in healthcare technology and automation,” said Ravi Sachdev, Partner at CD&R. “We see tremendous opportunity to build on R1’s differentiated platform to continue delivering solutions to help healthcare providers operate more efficiently and reduce costs in the system. We are excited to work alongside TowerBrook and the talented team at R1 to continue setting the standard for healthcare performance.”
Upon completion of the transaction, R1 will become a private company and its shares will no longer trade on Nasdaq. The transaction is expected to close by the end of the year, subject to customary closing conditions, including receipt of stockholder approval and regulatory approvals. The transaction is expected to be financed with a combination of committed debt financing and equity from investment funds affiliated with TowerBrook and CD&R.
R1 Second Quarter 2024 Financial Results
R1 expects to release its financial results for the second quarter ended June 30, 2024 on Wednesday, August 7, 2024. Given the transaction announced today, R1 will not host a live conference call in conjunction with its second quarter earnings release. A pre-recorded call will be available at the Investor Relations section of the Company’s website at ir.r1rcm.com on August 7, 2024.
Advisors
Qatalyst Partners and Barclays are serving as financial advisors to the Special Committee and Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal counsel to the Special Committee. Kirkland & Ellis LLP is acting as legal counsel to the Company.
Centerview Partners LLC is serving as lead financial advisor to TowerBrook and CD&R. In addition, Deutsche Bank and Royal Bank of Canada have committed to provide financing for the transaction, and Deutsche Bank Securities, Inc. and RBC Capital Markets, LLC are serving as financial advisors to TowerBrook and CD&R. Wachtell, Lipton, Rosen & Katz is acting as legal counsel to TowerBrook, and Debevoise & Plimpton LLP is acting as legal counsel to CD&R.
About TowerBrook
TowerBrook Capital Partners is a purpose-driven, transatlantic investment management firm that has raised in excess of
About CD&R
Founded in 1978, CD&R is a leading private investment firm with a strategy of generating strong investment returns by building more robust and sustainable businesses through the combination of skilled investment experience and deep operating capabilities. In partnership with the management teams of its portfolio companies, CD&R takes a long-term view of value creation and emphasizes positive stewardship and impact. The firm invests in businesses that span a broad range of industries, including industrial, healthcare, consumer, technology and financial services end markets. CD&R is privately owned by its partners and has offices in New York and London. For more information, please visit www.cdr-inc.com and follow the firm's activities through LinkedIn and @CDRBuilds on X/Twitter.
About R1 RCM
R1 is a leading provider of technology-driven solutions that transform the financial performance and patient experience for health systems, hospitals, and physician groups. R1’s proven and scalable operating models seamlessly complement a healthcare organization’s infrastructure, quickly driving sustainable improvements to net patient revenue and cash flows while driving revenue yield, reducing operating costs, and enhancing the patient experience. To learn more, visit: r1rcm.com.
Forward-Looking Statements Disclaimer
This communication includes certain “forward-looking statements” within the meaning of, and subject to the safe harbor created by, the federal securities laws, including statements related to the proposed merger of Project Raven Merger Sub, Inc. with and into the Company (the “Transaction”), including financial estimates and statements as to the expected timing, completion and effects of the Transaction. These forward-looking statements are based on the Company’s current expectations, estimates and projections regarding, among other things, the expected date of closing of the Transaction and the potential benefits thereof, its business and industry, management’s beliefs and certain assumptions made by the Company, all of which are subject to change. Forward-looking statements often contain words such as “expect,” “anticipate,” “intend,” “aims,” “plan,” “believe,” “could,” “seek,” “see,” “will,” “may,” “would,” “might,” “considered,” “potential,” “estimate,” “continue,” “likely,” “expect,” “target” or similar expressions or the negatives of these words or other comparable terminology that convey uncertainty of future events or outcomes. By their nature, forward-looking statements address matters that involve risks and uncertainties because they relate to events and depend upon future circumstances that may or may not occur, such as the consummation of the Transaction and the anticipated benefits thereof. These and other forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statements. Important risk factors that may cause such a difference include, but are not limited to: (i) the completion of the Transaction on anticipated terms and timing or at all, including obtaining required stockholder and regulatory approvals, and the satisfaction of other conditions to the completion of the Transaction; (ii) the ability of affiliates of Raven Acquisition Holdings, LLC to obtain the necessary financing arrangements set forth in the commitment letters received in connection with the Transaction; (iii) potential litigation relating to the Transaction that could be instituted against Raven Acquisition Holdings, LLC, the Company or their respective affiliates, directors, managers or officers, including the effects of any outcomes related thereto; (iv) the risk that disruptions from the Transaction, including the diversion management’s attention from the Company’s ongoing business operations will harm the Company’s business, including current plans and operations; (v) the ability of the Company to retain and hire key personnel in light of the Transaction; (vi) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the Transaction; (vii) continued availability of capital and financing and rating agency actions; (viii) legislative, regulatory and economic developments affecting the Company’s business; (ix) general economic and market developments and conditions; (x) potential business uncertainty, including changes to existing business relationships, during the pendency of the Transaction that could affect the Company’s financial performance; (xi) certain restrictions during the pendency of the Transaction that may impact the Company’s ability to pursue certain business opportunities or strategic transactions; (xii) unpredictability and severity of catastrophic events, including but not limited to acts of terrorism, pandemics, outbreaks of war or hostilities, as well as the Company’s response to any of the aforementioned factors; (xiii) significant transaction costs associated with the Transaction, including the possibility that the Transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; (xiv) the occurrence of any event, change or other circumstance that could give rise to the termination of the Transaction, including in circumstances requiring the Company to pay a termination fee or other expenses; (xv) competitive responses to the Transaction, including the possibility that competing offers or acquisition proposals for the Company will be made; (xvi) the risk that the Company’s stock price may decline significantly if the Merger is not consummated; (xvii) the risks and uncertainties pertaining to the Company’s business, including those set forth in Part I, Item 1A of the Company’s most recent Annual Report on Form 10-K and Part II, Item 1A of the Company’s subsequent Quarterly Reports on Form 10-Q, as such risk factors may be amended, supplemented or superseded from time to time by other reports filed by the Company with the SEC; and (xviii) the risks and uncertainties that will be described in the proxy statement available from the sources indicated below. These risks, as well as other risks associated with the Transaction, will be more fully discussed in the proxy statement. While the list of factors presented here is, and the list of factors to be presented in the proxy statement will be, considered representative, no such list should be considered a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material impact on the Company’s financial condition, results of operations, credit rating or liquidity. In light of the significant uncertainties in these forward-looking statements, the Company cannot assure you that the forward-looking statements in this communication will prove to be accurate, and you should not regard these statements as a representation or warranty by the Company, its directors, officers or employees or any other person that the Company will achieve its objectives and plans in any specified time frame, or at all. These forward-looking statements speak only as of the date they are made, and the Company does not undertake to and specifically disclaims any obligation to publicly release the results of any updates or revisions to these forward-looking statements that may be made to reflect future events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events, except as required by applicable law.
Important Additional Information and Where to Find It
In connection with the Transaction, the Company will file with the SEC a proxy statement on Schedule 14A, the definitive version of which will be sent or provided to Company stockholders. The Company, affiliates of the Company and affiliates of each of Clayton, Dubilier & Rice, LLC and TowerBrook Capital Partners L.P. intend to jointly file a transaction statement on Schedule 13E-3 (the “Schedule 13E-3”) with the SEC. The Company may also file other documents with the SEC regarding the Transaction. This document is not a substitute for the Proxy Statement, the Schedule 13E-3 or any other document which the Company may file with the SEC. Promptly after filing its definitive proxy statement with the SEC, the Company will mail or provide the definitive proxy statement, the Schedule 13E-3 and a proxy card to each Company stockholder entitled to vote at the meeting relating to the Transaction. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT, THE SCHEDULE 13E-3 AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE TRANSACTION BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION AND RELATED MATTERS. Investors and security holders may obtain free copies of the proxy statement, Schedule 13E-3 and other documents that are filed or will be filed with the SEC by the Company through the website maintained by the SEC at www.sec.gov, the Company’s website at ir.r1rcm.com or by contacting the Company’s Investor Relations Team at investorrelations@r1rcm.com.
The Transaction will be implemented solely pursuant to the Merger Agreement dated as of July 31, 2024, among the Company, Raven Acquisition Holdings, LLC and Project Raven Merger Sub, Inc., which contains the full terms and conditions of the Transaction.
Participants in the Solicitation
The Company and certain of its directors, executive officers and other employees, may be deemed to be participants in the solicitation of proxies from the stockholders of the Company in connection with the Transaction. Information regarding the Company’s directors and executive officers is contained in the “Director Compensation,” “Executive Compensation” and “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” sections of the definitive proxy statement for the 2024 annual meeting of stockholders of R1 RCM Inc., which was filed with the SEC on April 12, 2024 (the “Annual Meeting Proxy Statement”) and will be contained in the proxy statement to be filed by the Company in connection with the Transaction. Any change of the holdings of the Company’s securities by its directors or executive officers from the amounts set forth in the Annual Meeting Proxy Statement have been reflected in the following Statements of Changes in Beneficial Ownership on Form 4 filed with the SEC: by Michael C. Feiner, filed on May 23, 2024; by Agnes Bundy Scanlan, filed on May 23, 2024; by John B. Henneman, III, filed on May 23, 2024; by Anthony R. Tersigni, filed on May 23, 2024; by Jill Smith, filed on May 23, 2024; by Joseph Flanagan, filed on May 23, 2024; by Jeremy Delinsky, filed on May 23, 2024; by David M. Dill, filed on May 23, 2024; by Bradford Kyle Armbrester, filed on May 23, 2024; by Anthony J. Speranzo, filed on May 23, 2024; by Jennifer Williams, filed on June 3, 2024; by John Sparby, filed on June 3, 2024; by Pamela L. Spikner, filed on June 3, 2024; by Lee Rivas, filed on June 3, 2024; and by Kyle Hicok, filed on June 3, 2024. Additional information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, will be included in the definitive proxy statement relating to the Transaction when it is filed with the SEC. These documents (when available) may be obtained free of charge from the SEC’s website at www.sec.gov, the Company’s website at ir.r1rcm.com or by contacting the Company’s Investor Relations Team at investorrelations@r1rcm.com.
Contacts
Investor Relations:
Evan Smith, CFA
(516) 743-5184
investorrelations@r1rcm.com
Media Contact for R1:
Josh Blumenthal
(323) 449-4380
media@r1rcm.com
Andrew Brimmer / Andrea Rose
Joele Frank, Wilkinson Brimmer Katcher
(212) 355-4449
Media Contact for TowerBrook:
Brunswick Group
Alex Yankus
(917) 818-5204
towerbrookcapital@brunswickgroup.com
Media Contact for CD&R:
Jon Selib
212 407 5200
JSelib@cdr-inc.com
FAQ
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