Cognizant acquiring TriZetto for $2.7B
Cognizant Technology Solutions has agreed to buy TriZetto from Apax Partners for $2.7 billion in an all-cash deal that will allow the company to expand its healthcare industry software offerings.
Teaneck, N.J.-based Cognizant has arranged $1 billion in financing to back the purchase. 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 CEO Francisco D’Souza said in a 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's healthcare division represents about 26 percent of the technical-services provider’s revenue, which last year totaled $8.84 billion.
TriZetto and its 3,700 employees will be a part of Cognizant's existing healthcare business, which currently serves more than 200 clients, including 16 health plans and four pharmacy benefit management companies.
The transaction is expected to be completed during the fourth quarter.
Editor
Editor Beth earned a bachelor’s degree in journalism and master’s in health communication. She has worked in hospital, academic and publishing settings over the past 20 years. Beth joined TriMed in 2005, as editor of CMIO and Clinical Innovation + Technology. When not covering all things related to health IT, she spends time with her husband and three children.