(Bloomberg)--Cognizant Technology Solutions Corp.agreed to buy TriZetto Corp. from Apax Partners for $2.7 billion in an all-cash deal to expand in healthcare industry software.
Cognizant has arranged $1 billion in financing to back the purchase, the Teaneck, N.J.-based company said today in a statement. Additional revenue and savings will total about $1.5 billion in the next five years, the company said. Minority shareholders BlueCross BlueShield of Tennessee and Cambia Health Solutions will also sell their stakes in closely held TriZetto, Apax said in a separate statement.
Healthcare is undergoing structural shifts due to reform, cost pressure and shifting responsibilities between payers and providers, Cognizant Chief Executive Officer Francisco DSouza said in the statement. The integrated portfolio of capabilities across technology and operations will uniquely position us to help clients drive higher levels of operational efficiency, while re-imagining care for the future.
TriZetto, based in Englewood, Colo., was acquired by Apax for $1.19 billion in 2008. The company serves about 350 healthcare plans and supplies software to almost 245,000 doctors and other care providers. Cognizant said its healthcare division currently has about 200 customers and represents about 26 percent of the technical-services providers revenue, which last year totaled $8.84 billion.
JPMorgan Chase & Co. and Goldman Sachs served as financial advisers to TriZetto and Kirkland & Ellis LLP is acting as legal adviser. Cognizant was advised by Credit Suisse, UBS Securities LLC and Centerview Partners. Legal counsel to Cognizant was provided by Latham & Watkins LLP and Nishith Desai Associates.The companies already serve a number of clients in common, Cognizant said. The transaction is expected to be completed during the fourth quarter.
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