“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.
