Acquisition of Providence’s Current Modular Services Business Accompanied by 10-Year Agreement to Provide Comprehensive Revenue Cycle Management Services
R1 to Host Conference Call Today at
Providence serves the western
As part of the partnership, R1 has entered into a definitive agreement to acquire the Acclara business for
The addition of Acclara strengthens R1’s value proposition as the trusted partner of choice in comprehensive revenue cycle management. Acclara delivers cost-effective, innovative solutions to help healthcare providers across
“This strategic partnership with Providence demonstrates the confidence of one of our country’s largest and most innovative health systems in the full suite of R1’s technology and service solutions, at a moment when providers need our solutions more than ever,” said
“Over the past few years, as part of our journey to support our patient-care mission, we have significantly enhanced our own revenue cycle management assets and capabilities,” said Providence Chief Financial Officer
Strategic and Financial Benefits:
- Positions R1 as the Provider Platform of Choice: The proposed acquisition of Acclara and 10-year Providence partnership demonstrate the strength and flexibility of the R1 business model, and R1’s ability to deploy advanced technology solutions and drive execution across revenue cycle management processes to improve customer and patient outcomes. R1 expects the transaction to provide a foundation for additional growth opportunities by expanding the end-to-end relationship with Providence and other Acclara customers. In addition, Acclara’s capabilities will further extend the breadth and scale of R1’s physician and modular businesses and are anticipated to further leverage technology and automation capabilities and drive future innovation fueled by an even larger real-time structured and unstructured data footprint.
- Strong Financial Profile with Embedded Long-term Growth: The proposed 10-year agreement between Acclara and Providence combined with Acclara’s complementary capabilities are expected to expand R1’s scope of operations and drive revenue and Adjusted EBITDA growth. The combination of performance solutions and full-suite contracts is expected 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. - Significant Cost Synergy Opportunities: As a result of the acquisition, R1 estimates that it could realize approximately $30 million in run-rate cost synergies by the third year following the closing and run-rate cost synergies of approximately
$50 million by year five.
Transaction Details
Under the terms of the acquisition agreement, R1 will acquire Acclara for
The transaction, which is expected to be completed in early 2024, is subject to customary closing conditions, including the receipt of regulatory approvals, as well as the entry of Providence and Acclara into the 10-year revenue cycle management agreement.
R1 expects to finance the transaction with a new Term Loan B issued prior to close as well as its existing revolver.
Conference Call
R1 will host a conference call today at
Advisors
About
R1 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.
About Acclara
Acclara, a for-profit subsidiary of Providence, is dedicated to transforming the healthcare industry by providing cost-effective, high-quality revenue cycle management solutions that empower healthcare providers to focus on their primary mission—patient care. With a workforce of over 2,600 employees spanning all 50 states, Acclara leverages extensive industry expertise and best practices to assist health systems and providers in enhancing cash flow, reducing administrative complexities, and ensuring compliance. For more information about Acclara, please visit Acclara.com.
About Providence
Providence is a national, not-for-profit Catholic health system comprising a diverse family of organizations and driven by a belief that health is a human right. With 51 hospitals, over 1,000 physician clinics, senior services, supportive housing, and many other health and educational services, the health system and its partners employ more than 120,000 caregivers serving communities across seven states –
Forward-Looking Statements
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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: (i) the ability of the parties to consummate the acquisition and related transactions in a timely manner or at all; (ii) satisfaction of the conditions precedent to the consummation of the acquisition and related transactions, including the receipt of required regulatory approvals; (iii) the Company's ability to timely and successfully achieve the anticipated benefits and potential synergies of the acquisition and related transactions; (iv) the Company's failure to promptly restate the financial statements for non-reliance periods and file the required reports with the
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.
Estimated Financial Contribution
All data regarding estimated financial contribution in this presentation are forward-looking statements that are based on assumptions that are inherently subject to significant uncertainties and contingencies, many of which are beyond the Company's control. No independent registered public accounting firm has audited, reviewed, compiled or performed any procedures with respect to the combined financial information of the Company contained herein. Such information may not be included, may be adjusted or may be presented differently in other documents.
Non-GAAP Financial Information
Some of the financial information and data contained in this presentation, including Adjusted EBITDA (and related measures), have not been prepared in accordance with
Contacts
Investor Relations:
(516) 743-5184
investorrelations@r1rcm.com
Media Relations:
R1PR@allisonpr.com
Providence
(206) 310-4358
Melissa.tizon@providence.org
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