UTAH: R1 RCM Inc. (NASDAQ: RCM), a leading provider of technology-driven solutions for healthcare providers, has entered into a definitive agreement to be acquired by investment funds affiliated with TowerBrook Capital Partners and Clayton, Dubilier & Rice (CD&R), in an all-cash transaction with an enterprise value of approximately $8.9 billion.

An investment vehicle controlled by TowerBrook is currently the beneficial owner of approximately 36% of the Company’s outstanding shares of common stock, including the warrant held by TowerBrook. Under the terms of the agreement, TowerBrook and CD&R will acquire all the outstanding common stock that TowerBrook does not currently own for $14.30 per share.

The consideration of $14.30 per share in common stock to R1 stockholders represents a premium of approximately 29% to the Company’s unaffected closing price on February 23, 2024, the last full trading day before New Mountain Capital publicly disclosed its initial non-binding acquisition proposal on its Schedule 13D.

The transaction has been unanimously approved by a special committee of the R1 Board of Directors comprised solely of independent directors (the “Special Committee”), which, as previously announced on March 11, 2024, was formed to evaluate strategic alternatives. Transaction negotiations were led by the Special Committee, advised by independent legal and financial advisors, and following the recommendation of the Special Committee, R1’s Board approved the transaction.

“TowerBrook has been an outstanding long-term investor and partner to R1 and shares our vision of being the automation platform of choice for the provider industry,” said Lee Rivas, R1’s CEO.

“Our agreement reflects TowerBrook’s and CD&R’s confidence in our team and the unmatched scale, technology and value we provide. We believe the transaction represents the best path forward for R1 at an attractive valuation to our stockholders that reflects the Company’s position as a leading provider of technology-driven solutions for its customers.”

Ian Sacks, Managing Director at TowerBrook, stated, “As a long-term, responsible investor in R1, TowerBrook has supported the development of R1 as a leader in healthcare provider revenue management since 2016. Together with CD&R, we look forward to continuing to invest in the Company’s core operations to drive customer performance and value while also continuing to build R1 as a leader in intelligent automation and in the use of GAI in revenue management.” 

“R1 is a trusted partner in healthcare technology and automation,” said Ravi Sachdev, Partner at CD&R. “We see tremendous opportunity to build on R1’s differentiated platform to continue delivering solutions to help healthcare providers operate more efficiently and reduce costs in the system. We are excited to work alongside TowerBrook and the talented team at R1 to continue setting the standard for healthcare performance.”

Upon completion of the transaction, R1 will become a private company and its shares will no longer trade on Nasdaq. The transaction is expected to close by the end of the year, subject to customary closing conditions, including receipt of stockholder approval and regulatory approvals. The transaction is expected to be financed with a combination of committed debt financing and equity from investment funds affiliated with TowerBrook and CD&R.

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