Cloud platform healthcare technology company Inovalon Holdings Inc. (INOV:NASDAQ), today announced that "it has entered into a definitive agreement to be acquired by an equity consortium led by Nordic Capital and joined by Insight Partners, as lead co-investor, 22C Capital, and Inovalon founder and CEO Keith Dunleavy, M.D. and certain Class B stockholders of Inovalon in an all-cash transaction with an enterprise value of approximately $7.3 billion."
The company stated that under the terms of the buyout agreement, Inovalon Holdings shareholders will receive $41.00 per share in cash for each Class A or Class B share currently owned. The firm advised that the $41.00 share price represents a 25.3% premium over the closing price of Inovalon's Class A shares on July 26, 2021.
Inovalon stated that the transaction terms and details were evaluated by independent members of the company's Board of Directors, who based their decision on the unanimous recommendation from a special committee of independent directors who were tasked with negotiating the terms, conditions, and price.
The firm stated that when the transaction is completed, Inovalon will become a private entity giving it increased flexibility to pursue strategic opportunities to expand its market and innovation. The company indicated that Keith Dunleavy, M.D. will continue to own a significant stake in the company and will serve as CEO and as a board member.
William J. Teuber, Jr., Lead Independent Director of the board and chair of the Special Committee remarked, "Today's announcement is the culmination of a thorough process of evaluating strategic alternatives and represents a compelling opportunity to deliver immediate and more certain cash value to stockholders at a significant premium…During our evaluation it became clear that not only is the consortium led by Nordic Capital offering our shareholders compelling value, they also have a deep appreciation for Inovalon's cloud-based platforms and data capabilities, as well as an appreciation for the people, mission, and the value impact of the company."
Inovalon's Founder, CEO and Chairman Keith Dunleavy, M.D., commented, "For more than two decades, Inovalon has developed technologies that enable the connectivity, aggregation, and analysis of healthcare data to empower better clinical outcomes and economics across the healthcare ecosystem…We are excited to enter the next chapter in Inovalon's journey together with such great partners as Nordic Capital, Insight Partners, and 22C Capital."
"Their significant experience in the areas of software, data, and healthcare is key. This, together with their longer-term focus, operational experience and international perspective, is an exciting combination for what we see in front of us," Dr. Dunleavy added.
Fredrik Näslund, Partner, Nordic Capital Advisors stated, "As a leading healthcare and technology investor, Nordic Capital has long admired Inovalon's leadership across the healthcare ecosystem and its cloud-based tools leveraging advanced data analytics to meaningfully empower its customers and the patients they serve."
The company advised that that the transaction is expected to close in late 2021 or early 2022 but remains subject to ordinary closing conditions, shareholder approval, and receipt of U.S. antitrust approval.
Nordic Capital was described in the report as a leading private equity company that invests in the areas of healthcare, technology and payments, financial services, and certain industrial and business services. Since inception, Nordic has invested greater than 17 billion euros in about 120 different investments. The firm has offices in Sweden, Denmark, Finland, Norway, the U.K., Germany, and the U.S.
Insight Partners is a global venture capital and private equity firm that invests in high-growth technology and software ScaleUp companies. The report mentions that the firm has raised more than $30 billion in capital commitments and has invested in over 400 companies worldwide.
Inovalon is based in Bowie, Md., and is a provider of data-driven, cloud-based platforms models for the healthcare industry. The company claimed that "its Inovalon ONE® Platform brings to the marketplace a national-scale capability to interconnect with the healthcare ecosystem, aggregate and analyze data in real time, and empower the application of resulting insights to drive meaningful impact at the point of care." The firm stated that virtually anyone who is involved in healthcare can benefit from using its platform's capabilities. Specific applications are available for health plans, service providers, diagnostic companies, life sciences companies, and pharmacy organizations. The firm provides technology and support to around 500 healthcare organizations. The company's platforms interface with data integrated from 941,000 physicians, 483,000 clinical facilities, 243 million Americans, and 38 billion medical events.
Inovalon Holdings started off the day with a market capitalization of around $5.8 billion with approximately 156.3 million shares outstanding. INOV shares opened 8.5% higher today at $40.40 (+$3.18, +8.54%) over yesterday's $37.22 closing price and reached a new 52-week high price this morning of $40.50. The stock traded today between $40.20 and $40.50 per share and closed for trading at $40.32 (+$3.10, +8.33%).
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