The TriZetto Group's conversion from a public-traded company to a private concern is nearing its conclusion.
At a special meeting held on July 14, shareholders representing 34.2 million shares of TriZetto's common stock, or 99.8 percent of the company's share votes and 79.2 percent of shares outstanding, approved a proposed plan of merger with TZ Holdings, L.P., an entity that is majority-owned by funds affiliated with Apax Partners, L.P.
"We are pleased to receive such high stockholder approval for the Apax transaction," said Jeff Margolis, TriZetto's chairman and CEO. "With this shareholder approval, we can focus on completing the financing and moving towards a targeted closing of this transaction as expeditiously as possible."
Apax Partners, a London-based private equity firm, announced in April its plans to purchase TriZetto, a Newport Beach, Calif.-based provider of benefits-based information technology servers for healthcare payers and providers, for approximately $1.4 billion. Following completion of the deal, Apax will control 71 percent of TriZetto, while Blue Cross Blue Shield of Tennessee and The Regence Group - two TriZetto customers who are providing financing for the deal - will each hold 12.5 percent interest in the company.
News of the deal - and plans to take TriZetto private - prompted some stockholders to file a lawsuit in the Delaware Court of Chancery, seeking more information from TriZetto executives on negotiations between the company and Apax. The suit prompted the court to delay TriZetto's shareholder vote and ask the company for more information. TriZetto announced a proposed settlement of litigation on July 9, providing additional information to stockholders about the negotiations.
Both TriZetto and Apax officials have maintained that TriZetto's direction won't change after the deal is completed. TriZetto officials have said going private would allow them to focus on long-term goals rather than short-term profits.
"I ... believe that going private will give us greater flexibility in thinking about longer-term investments in product development, acquisitions and partnerships that will benefit our customers," Margolis said during an April conference call with investors. "Under any circumstance, TriZetto will remain an independent organization, maintaining its vision, mission and focus on the creation and deployment of software and services, to enable healthcare payers to play a leading role in transforming the nation's healthcare system through integrated healthcare management. Our commitment to our customers will not change. Blue Cross Blue Shield of Tennessee and the Regence Group are minority investors in this transaction. As innovative and long standing customers, their participation is a strong endorsement of TriZetto's strategy and vision."
Will this deal make The TriZetto Group a better company? E-mail your comments to Managing Editor Eric Wicklund at eric.wicklund@medtechpublishing.com.