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TowerBrook Capital Partners and Clayton Dubilier & Rice (CD&R) have agreed to take R1 RCM Inc. private in a transaction valued at approximately $8.9 billion, the healthcare tech provider announced Thursday.

R1 RCM $8.9B Deal : Legal Advisers on the Deal

Four law firms are serving as principal advisers. Kirkland & Ellis LLP is representing R1, while Skadden Arps Slate Meagher & Flom LLP is advising a special committee of its board. Wachtell Lipton Rosen & Katz is advising TowerBrook, and Debevoise & Plimpton LLP is guiding CD&R.

R1 RCM $8.9B Deal : Acquisition Details

TowerBrook and CD&R will acquire all outstanding common stock of R1 that TowerBrook does not already own for $14.30 per share. Currently, TowerBrook owns about 36% of R1's outstanding shares.

R1, which provides revenue cycle management to hospitals, health systems, and physician groups across the U.S., said its board has approved the transaction. The company expects the deal to close by the end of the year, pending stockholder and regulatory approvals.

"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's CEO, in a statement. "Our agreement reflects TowerBrook's and CD&R's confidence in our team and the unmatched scale, technology, and value we provide."

Financial Impact and Market Response

The per-share price represents a roughly 29% premium to R1's closing price on Feb. 23, the last trading day before private equity firm New Mountain Capital disclosed an initial offer. New Mountain Capital made a revised bid offering $13.25 per share early last month, according to a securities filing.

On Thursday, R1's stock was up about 8.7% to $14 per share.

"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."

Future Opportunities

Ravi Sachdev, partner at CD&R, added: "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."

R1 RCM $8.9B Deal : Legal Teams Involved

Sullivan & Cromwell LLP represented Barclays, a financial adviser to the R1 special committee, led by corporate partner Stephen M. Kotran.

The Kirkland team advising R1 includes corporate partners Robert Hayward, Sarkis Jebejian, Brad Reed, and Steven Choi, as well as capital markets partners Ana Sempertegui and Ben Richards.

The Skadden team representing the R1 special committee includes M&A partners Graham Robinson, Laura Knoll, and Faiz Ahmad, banking partner Janine Jjingo, life sciences and healthcare partner Maya Florence, tax partner Moshe Spinowitz, antitrust partners Maria Raptis and Ingrid Vandenborre, and capital markets partner Ryan Dzierniejko.

The Wachtell Lipton team representing TowerBrook includes corporate partners Steven A. Cohen and Victor Goldfeld, antitrust partner Christina C. Ma, executive compensation and benefits partner Michael J. Schobel, finance partner Gregory E. Pessin, and tax partner Jodi J. Schwartz.