Investment firm Blackstone Capital Partners will acquire approximately 70 percent of revenue cycle management firm Emdeon Business Services for $3 billion.

The companies expect the acquisition to close during 2011 and senior management will remain in place at Emdeon. The Wall Street Journal a week ago first reported the acquisition talks, sparking a run-up in Emdeon's stock value on July 27. Emdeon became a publicly traded company in August 2009 during one of the few IPOs conducted that year. The IPO raised $367 million ,with Emdeon receiving net proceeds of $155.4 million. The company will now return to being a privately held firm.

Nashville, Tenn.-based Emdeon is best known for its claims clearinghouse operation--the largest in the industry--that processes hospital, medical, pharmacy and durable medical equipment claims, as well as related administrative and financial transactions, and also electronic prescriptions and laboratory requests and results.

The company also offers claims auditing software and consulting services to insurers, and a suite of revenue cycle management services and software to providers such as accounts receivables, managing medical denials and appeals, and billing and collections.

The $3 billion price tag is a considerable return on investment for Emdeon's current equity firm owners, General Atlantic LLC and Hellman & Friedman LLC. General Atlantic bought 52 percent of the company in late 2006 for $1.2 billion. In early 2008, General Atlantic and Hellman & Friedman bought the remaining 48 percent for $575 million. Under the Blackstone deal, Hellman & Friedman will retain a "significant" minority interest in Emdeon, according to the firms.

 

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