R1 RCM agrees to purchase AI revenue cycle company Cloudmed in $4.1B deal
Revenue cycle management firm R1 RCM has agreed to purchase Cloudmed in a deal valued at approximately $4.1 billion, the pair announced Monday.
The all-stock transaction has been approved by both company boards and includes $857 million of Cloudmed’s net debt. Atlanta-based Cloudmed is a private equity-backed revenue intelligence venture that uses AI software to automize revenue cycle solutions for healthcare providers. It serves 400 of the largest systems in the U.S., including 47 of the top 50 hospitals, the company said.
“This transaction accelerates our strategy to build the most scalable, flexible, and integrated platform for the revenue cycle and consumer engagement in healthcare,” added Joe Flanagan, president and chief executive officer of R1. “Our combined solutions, including enhanced automation capabilities, will further transform the patient experience and drive continued improvement in our customers’ financial results.”
Flanagan will operate as the new CEO of the combined company and Cloudmed’s chief executive, Lee Rivas, will serve as its president. The transaction is expected to close next quarter, subject to certain regulatory approvals.
“We are excited to support the long-term vision of the combined company to modernize the U.S. healthcare sector,” said Matt Holt, managing director and president of private equity at New Mountain Capital, which backs Cloudmed.
Matt joined Chicago’s TriMed team in 2018 covering all areas of health imaging after two years reporting on the hospital field. He holds a bachelor’s in English from UIC, and enjoys a good cup of coffee and an interesting documentary.