R1 RCM Completes Acquisition of Acclara, Providence’s Modular Services Business
January 17 2024 - 4:05PM
R1 RCM Inc. (NASDAQ: RCM) (“R1”), a leading provider of
technology-driven solutions that transform the patient experience
and financial performance of healthcare providers, today announced
that it has completed its previously announced acquisition of
Acclara from Providence, one of the nation's largest health
systems. In addition, the Company announced that it expects to
release financial results for the fourth quarter and full year
ended December 31, 2023, and its 2024 outlook and will host a
conference call at 8:00 a.m. ET on Tuesday, February 27, 2024, to
discuss the results and business outlook.
Upon closing, R1 begins its 10-year partnership with Providence
for comprehensive revenue cycle services that leverage the breadth
of integrated technology and services capabilities of both R1 and
Acclara. Providence is among the top 10 U.S. integrated delivery
networks (IDNs), recognized for leadership in developing innovative
delivery models and a commitment to technology.
“We are pleased to complete the acquisition of Acclara and enter
into our long-term partnership with Providence, and we look forward
to the significant value we believe this transaction will create
for customers and shareholders. Acclara strengthens our position as
the trusted partner of choice in revenue cycle management and
extends our ability to deploy advanced technology solutions and
drive execution to improve customer and patient outcomes,” said Lee
Rivas, chief executive officer of R1. “We warmly welcome the
Acclara team to R1 and look forward to new growth opportunities
together and to leveraging our technology and automation
capabilities across our expanded portfolio.”
R1 expects the acquisition of Acclara, together with the new
partnership with Providence, to contribute more than $625 million
in revenue and approximately $185 million to Adjusted EBITDA by
year five of the partnership, not including potential revenue
synergies.
Transaction DetailsUnder the terms of the
securities purchase agreement governing the terms of the
acquisition, R1 acquired Acclara for $675 million in cash and a
warrant to purchase up to 12.2 million shares of R1 stock at a
strike price of $10.52, subject to a three-year lock-up. R1
financed the cash consideration of the transaction and associated
fees and expenses with $575 million in new Term B Loans, and the
remainder with borrowings under R1’s existing revolver and cash on
hand.
Conference CallTo participate in the conference
call on February 27, 2024, please dial 888-330-2022 (646-960-0690
outside the U.S. and Canada) using conference code number 5681952.
A live webcast and replay of the call will be available at the
Investor Relations section of the Company’s website at
ir.r1rcm.com.
AdvisorsCenterview Partners LLC and J.P. Morgan
acted as financial advisors to R1, and Perkins Coie LLP, Kirkland
& Ellis LLP, and Baker Donelson acted as legal counsel. BDT
& MSD Partners acted as financial advisor to Providence, and
McDermott Will & Emery and ArentFox Schiff LLP acted as legal
counsel.
About R1 RCMR1 is a leading provider of
technology-driven solutions that transform the patient experience
and financial performance of hospitals, health systems, and medical
groups. R1’s proven and scalable operating models seamlessly
complement a healthcare organization’s infrastructure, quickly
driving sustainable improvements to net patient revenue and cash
flows while reducing operating costs and enhancing the patient
experience. To learn more, visit: r1rcm.com.
Forward-Looking Statements
This press release contains “forward-looking statements”
made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, as amended, and
Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements generally relate to future
events and relationships, plans, future growth and future
performance, including, but not limited to, statements about the
completion and effects of the acquisition of Acclara and related
transactions, including the Company’s 10-year relationship with
Providence, the timing of the release of the Company’s financial
results, the Company’s strategic initiatives, the Company’s capital
plans, the Company’s costs, the Company’s ability to successfully
implement new technologies, the Company’s future financial and
operational performance and the Company’s liquidity. These
statements are often identified by the use of words such as
“anticipate,” “believe,” “contemplate,” “designed,” “estimate,”
“expect,” “forecast,” “goal,” “intend,” “may,” “outlook,” “plan,”
“predict,” “project,” “see,” “seek,” “should,” “target,” “would”
and similar expressions or variations or negatives of these words,
although not all forward-looking statements contain these
identifying words. These statements are based on various
assumptions, whether or not identified in this press release, and
on the current expectations of the Company’s management and are not
predictions of actual performance. These forward-looking statements
are provided for illustrative purposes only and are not intended to
serve as, and must not be relied on by any investor as, a
guarantee, assurance, prediction or definitive statement of fact or
probability. Actual outcomes and results may differ materially from
those contemplated by these forward-looking statements as a result
of uncertainties, risks and changes in circumstances, including but
not limited to risks and uncertainties related to the Company’s
ability to timely and successfully achieve the anticipated benefits
and potential synergies of the acquisition of Acclara and related
transactions, including the Company’s 10-year relationship with
Providence, and the impact of the restatements of the financial
statements for non-reliance periods on the price of the Company’s
common stock, reputation and relationships with investors,
suppliers, customers, employees and other parties. Additional risks
and uncertainties that could cause actual outcomes and results to
differ materially from those contemplated by the forward-looking
statements are included under the heading “Risk Factors” in the
Company’s Amendment No. 1 to Annual Report on
Form 10-K/A for the year ended December 31, 2022,
quarterly reports on Form 10-Q and any other periodic reports
that the Company may file with the Securities and Exchange
Commission. The foregoing list of factors is not exhaustive. All
forward-looking statements included herein are expressly qualified
in their entirety by these cautionary statements as of the date
hereof and involve many risks and uncertainties that could cause
actual results to differ materially from those expressed or implied
in the forward-looking statements. Subsequent events and
developments, including actual results or changes in the Company’s
assumptions, may cause the Company’s views to change. The Company
assumes no obligation and does not intend to update these
forward-looking statements, except as required by law. You are
cautioned not to place undue reliance on such forward-looking
statements.
Contacts
R1 RCM Inc.
Investor Relations:Evan Smith, CFA(516)
743-5184investorrelations@r1rcm.com
Media Relations:Yancey CaseyAmendola Communications(678)
895-9401ycasey@acmarketingpr.com
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