R1 RCM to be acquired by TowerBrook and CD&R in $8.9 billion deal

R1 RCM Inc., a Murray-based provider of practice operations software for healthcare providers, has announced that it has entered into an agreement to be acquired by investment funds affiliated with TowerBrook Capital Partners and Clayton, Dubilier & Rice (CD&R), in an all-cash transaction with an enterprise value of approximately $8.9 billion.

TowerBrook, based in London, England, owned approximately 36 percent of R1 RCM common stock prior to the sale agreement. Under the terms of the agreement, TowerBrook and CD&R, based in New York City, will acquire all of the outstanding common stock that TowerBrook does not currently own for $14.30 per share.

The payment of $14.30 per share in common stock to R1 RCM stockholders represents a premium of approximately 29 percent to the company’s closing price on Feb. 23, the last full trading day before CD&R affiliate New Mountain Capital publicly disclosed its initial acquisition proposal. The transaction has been unanimously approved by a special committee of the R1 board of directors, which was formed to evaluate alternatives.

“TowerBrook has been an outstanding long-term investor and partner to R1 and shares our vision of being the automation platform of choice for the provider industry,” said Lee Rivas, R1 RCM’s CEO. “Our agreement reflects TowerBrook’s and CD&R’s confidence in our team and the unmatched scale, technology and value we provide. We believe the transaction represents the best path forward for R1 at an attractive valuation to our stockholders that reflects the company’s position as a leading provider of technology-driven solutions for its customers.”

“As a long-term, responsible investor in R1, TowerBrook has supported the development of R1 as a leader in healthcare provider revenue management since 2016,” said Ian Sacks, managing director at TowerBrook. “Together with CD&R, we look forward to continuing to invest in the company’s core operations to drive customer performance and value while also continuing to build R1 as a leader in intelligent automation.”

“R1 is a trusted partner in healthcare technology and automation,” said Ravi Sachdev, partner at CD&R. “We see tremendous opportunity to build on R1’s differentiated platform to continue delivering solutions to help healthcare providers operate more efficiently and reduce costs in the system. We are excited to work alongside TowerBrook and the talented team at R1 to continue setting the standard for healthcare performance.”

Upon completion of the transaction, R1 RCM will become a private company and its shares will no longer trade on Nasdaq. The transaction is expected to close by the end of the year, subject to customary closing conditions, including receipt of stockholder approval and regulatory approvals.