Gainwell Technologies Acquires HMS for $3.4 Billion

HMS, a developer of a technology-enabled approach to pre-payment clinical claim reviews that maximizes savings for healthcare payers and speeds the payment process, agreed to be acquired by Gainwell Technologies (a provider of Medicaid management solutions) backed by private equity firm Veritas Capital, a private equity firm.

Under the terms of the agreement, HMS shareholders will receive $37 in cash per share. The all-cash transaction values HMS at approximately $3.4 billion. The transaction is expected to close in the first half, subject to conditions including regulatory clearances.

Gainwell will acquire the HMS capabilities focused on the Medicaid market, including solutions delivered to states and managed care organizations. Fellow Veritas-backed company Cotiviti will also benefit from HMS capabilities, mainly focused on the commercial, Medicare, and federal healthcare markets.

HMS provides a broad range of payment accuracy and population health management solutions that help move healthcare forward. The company also works with healthcare organizations to reduce costs and improve overall health outcomes.

Ramzi Musallam, CEO and Managing Partner of Veritas, said: “HMS has developed a highly differentiated set of capabilities that deliver tangible value across the government and commercial healthcare payer spectrum. By aligning HMS’ market focus with Gainwell and Cotiviti, these organizations can become even more strategically aligned to their customers’ missions.”

Barclays is acting as financial advisor to HMS, and Latham & Watkins is serving as legal advisor to HMS. Goldman Sachs is acting as an exclusive financial advisor to Gainwell, and Schulte Roth & Zabel serves as legal advisor to Gainwell.

“HMS has built a market-leading healthcare technology and analytics enterprise, and we believe this transaction delivers compelling and certain value to our shareholders while enhancing our ability to provide clients with world-class, data-driven analytics solutions,” said Bill Lucia, Chairman and CEO of HMS.

A total of 132 digital health companies were acquired in the first nine months (9M) of 2020, compared to 125 in 9M 2019, according to Mercom’s 9M 2020 Digital Health Funding and M&A Report. Learn more

Image credit: HMS