Apax Partners has agreed to acquire The TriZetto Group Inc. (Nasdaq: TZIX), a Newport Beach, Calif.-based provider of IT solutions for the healthcare supply chain. The deal is valued at approximately $1.4 billion, with TriZetto stockholders to receive $22 per share in cash (29% premium to 30-day trading average). TriZetto customers BlueCross BlueShield of Tennessee and The Regence Group will participate alongside Apax as equity investors.
The TriZetto Group, Inc. (TZIX) announced today that it has entered into a definitive agreement to be acquired and taken private by funds advised by Apax Partners, a growth-focused, global private equity firm with $35 billion in funds under advice and significant expertise in healthcare and technology. Under the terms of the agreement and plan of merger, TriZetto shareholders will receive $22.00 per share in cash, representing a 29% premium over the 30 calendar-day average closing price of the company's stock. The transaction is valued at approximately $1.4 billion, including consideration for stock options and shares related to TriZetto's outstanding convertible notes. BlueCross BlueShield of Tennessee and The Regence Group, both customers of TriZetto, are providing a portion of the funding for the transaction and will be equity investors in the newly private company.
“The achievement of TriZetto's Integrated Healthcare Management vision is a multi-year journey that will require both conventional and non-conventional business investment within an integrated framework,” said Jeff Margolis, TriZetto's chairman and CEO. “Payers are in the best position to lead the way towards fundamental industry improvements, and our technology solutions are essential in supporting that transformation. Apax Partners, which shares our strategic view of the marketplace, provides an outstanding opportunity to accelerate solutions development investments on behalf of our payer customers to create an integrated linkage among consumers, providers, employers and brokers.”
“We see the confluence of healthcare and information technology as a key area of focus for strategic investments,” said Buddy Gumina, a partner and head of U.S. healthcare at Apax Partners. “TriZetto represents a unique asset with a tremendous opportunity to drive positive changes in organized systems of healthcare, both in the U.S. and abroad. We look forward to helping the company accelerate the realization of its vision, and we are delighted to have the investment participation of two of TriZetto's key customers who have had a long history in working with the company and recognizing the strategic importance of IT as a critical component of adapting to the needs of the rapidly evolving healthcare landscape.”
Bill Sullivan, a partner at Apax Partners, commented, “TriZetto is led by an outstanding management team that we know very well, and we are looking forward to working with them as our strategic partner on the next stage of the company's development. Furthermore, we are delighted to be investing in a company that straddles two of our core investment sectors, healthcare and technology.”
TriZetto's Board of Directors approved the transaction, which is subject to customary closing conditions, including shareholder and regulatory approvals. Closing is expected to take between four and six months. The company does not anticipate any material changes in its product offerings, staffing or facility locations as a result of this change in ownership.
RBC Capital Markets is the exclusive debt underwriter on the deal. Deutsche Bank Securities acted as the exclusive financial advisor to Apax Partners. BlueCross BlueShield of Tennessee and Regence were advised by Cain Brothers and Company. UBS Investment Bank served as the exclusive financial advisor to TriZetto.
About Apax Partners
Apax Partners is one of the world's leading private equity investment groups. It operates across the United States, Europe, Israel and Asia and has more than 30 years of investing experience. Funds under the advice of Apax Partners total $35 billion around the world. These Funds provide long-term equity financing to build and strengthen world-class companies. Apax Partners Funds invest in companies across its global sectors of Tech & Telecom, Retail & Consumer, Media, Healthcare and Financial & Business Services. Significant recent investments by the Apax Partners Healthcare and Tech & Telecom teams include: General Healthcare Group, Capio, Apollo Hospitals, Qualitest Pharmaceuticals, Spectrum Laboratories, SMART Technologies and TDC A/S. For more information visit: www.apax.com.
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