Machinify completes $670 million acquisition of Performant Healthcare

Healthcare intelligence company Machinify has completed its acquisition of Performant Healthcare, a company that manages healthcare payment integrity. 

The deal, worth $670 million, was engineered to expand the reach of Machinify's artificial intelligence-based technology to a broader range of clients, including government programs. 

In a statement, Machinify CEO David Pierre said the two companies share “highly complementary assets.”

“Performant has built deep relationships in the government sector, which expands on Machinify’s strong and expanding presence with national and regional payers,” said Pierre. 

WHAT'S THE IMPACT 

Performant stockholders voted to approve the transaction at the company’s special meeting of stockholders on Oct. 17.

Machinify said it will combine its AI platform with Performant's audit and recovery expertise, allowing the company to speed its operations with an eye toward reducing administrative burdens and achieving greater savings for health plans. 

In particular, the company said the deal will improve its end-to-end intelligence – spanning claim error detection, prevention, recovery and coordination of benefits. 

Performant CEO Simeon Kohl will remain with the company, joining the Machinify leadership team, the companies said.

“I’m excited to join forces with Machinify at such a pivotal moment for the industry,” said Kohl. “By combining our deep expertise with Machinify’s AI platform, we’ll be able to deliver even greater value to our clients – streamlining the payment process, improving accuracy, and supporting better outcomes across the healthcare system.”

Performant’s shares will no longer be publicly traded on and will be delisted from Nasdaq, and the company will now operate as a privately held entity.

THE LARGER TREND 

Healthcare merger and acquisition deal volumes have remained steady despite an uncertain regulatory environment, with volumes pacing far ahead of where they were before the COVID-19 pandemic.

According to a June PwC report, there were 445 announced transactions through May 15, bringing the value of the total number of deals over the past few months to $64 billion. The one announced megadeal (deals greater than $5 billion), at $17.9 billion, was the Walgreens Boots Alliance/Sycamore deal, which contributed about 28% of all disclosed value.