Healthcare Technology Featured Article

September 16, 2014

Cognizant Bolsters Healthcare Business with TriZetto Acquisition for $2.7 Billion

In a move clearly intended to strengthen its healthcare information technology business, Cognizant Technology Solutions announced the purchase of privately held TriZetto Corp. for $2.7 billion in cash.

The acquisition is a boon for Cognizant, which will incorporate TriZetto’s software platforms as well as approximately $1.5 billion of potential revenue over the next five years. The company plans to integrate TriZetto’s offerings and its employees into Cognizant’s existing healthcare business.

"TriZetto solutions enable the healthcare interactions of millions of people in the U.S. every day," said Jude Dieterman, president and COO of TriZetto. "Our agreement with Cognizant advances our vision of simplifying healthcare for everyone. We believe the combination of Cognizant and TriZetto's talented employees and innovative technology and operations will have a meaningful impact on the way health is managed and care is delivered."

Cognizant currently serves more than 200 clients, including 16 of the top 20 U.S. health plans and four of the top five pharmacy benefit management companies, according to the company. Healthcare represents approximately 26 percent of Cognizant's current revenue.

TriZetto has about 350 health plans and nearly 245,000 doctors and other health care providers as customers. It employs about 3,800 people in the United States and India.

"Healthcare is undergoing structural shifts due to reform, cost pressure and shifting responsibilities between payers and providers. This creates a significant growth opportunity, which TriZetto will help us capture," said Francisco D'Souza, CEO of Cognizant. "We are excited that the integrated portfolio of capabilities across technology and operations will uniquely position us to help clients drive higher levels of operational efficiency, while re-imagining care for the future."

The integration reportedly will strengthen Cognizant’s healthcare services, including traditional IT services; management consulting, business process services and IT infrastructure services; and emerging delivery models.

According to the company, Cognizant will acquire a majority stake from funds managed by the private equity firm Apax Partners, as well as stakes from minority investors, BlueCross BlueShield of Tennessee and Cambia Health Solutions. The Apax funds acquired their stake in the company in 2008. The deal is subject to regulatory approval and is expected to be completed in the fourth quarter.

Edited by Maurice Nagle

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