Global private equity firm Apax Partners has acquired the TriZetto Group, Inc. for $1.4 billion and plans to take it private.
Under the terms of the agreement, Apax will pay $22 per share in cash, representing a 29 percent premium over the 30 calendar-day average closing price of TriZetto's stock.
TriZetto's board of directors approved the transaction, which is subject to customary closing conditions, including shareholder and regulatory approvals. Based in Newport Beach, Calif., TriZetto provides payer-focused software and services to improve the coordination of benefits and care in healthcare settings. The company's principal clients are national and regional health insurance plans and benefits administrators that provide transaction services to self-insured employer groups.
"The achievement of TriZetto's integrated healthcare management vision is a multi-year journey that will require both conventional and non-conventional business investment within an integrated framework," said Jeff Margolis, TriZetto's chairman and CEO. "Payers are in the best position to lead the way towards fundamental industry improvements, and our technology solutions are essential in supporting that transformation. Apax Partners, which shares our strategic view of the marketplace, provides an outstanding opportunity to accelerate solutions development investments on behalf of our payer customers to create an integrated linkage among consumers, providers, employers and brokers."
BlueCross BlueShield of Tennessee and The Regence Group, both customers of TriZetto, are providing funding for the transaction and will be equity investors in the newly private company.
"We see the confluence of healthcare and information technology as a key area of focus for strategic investments," said Buddy Gumina, a partner and head of U.S. healthcare at Apax Partners. "TriZetto represents a unique asset with a tremendous opportunity to drive positive changes in organized systems of healthcare, both in the U.S. and abroad. We look forward to helping the company accelerate the realization of its vision, and we are delighted to have the investment participation of two of TriZetto's key customers who have had a long history in working with the company and recognizing the strategic importance of IT as a critical component of adapting to the needs of the rapidly evolving healthcare landscape."
Bill Sullivan, a partner at Apax Partners, added, "TriZetto is led by an outstanding management team that we know very well, and we are looking forward to working with them as our strategic partner on the next stage of the company's development. Furthermore, we are delighted to be investing in a company that straddles two of our core investment sectors, healthcare and technology."
Closing is expected to take between four and six months. The company does not anticipate any material changes in its product offerings, staffing or facility locations as a result of this change in ownership.