NEWPORT BEACH, CA – London-based equity firm Apax Partners has agreed to buy 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. The stock-only portion of the deal is worth $943.7 million, based on 42.9 million shares outstanding in mid-February.
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.
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.”
Investors say TriZetto’s standing may be improved by the company’s recent efforts to move from one-time payments to subscriptions. Shares of the company’s stock jumped almost 20 percent following news of the deal.
“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,” said Buddy Gumina, a partner and head of U.S. healthcare at Apax Partners.