R1 RCM Acquired by TowerBrook, CD&R in $8.9B Deal
Deal News | Nov 19, 2024 | Clayton, Dubilier & Rice, Inc.
Clayton, Dubilier & Rice and TowerBrook Capital Partners have completed the acquisition of R1 RCM, a leading provider of automated revenue management solutions for healthcare providers. The transaction, which valued R1 at approximately $8.9 billion, involved the purchase of all outstanding shares not owned by TowerBrook at $14.30 per share in cash. As a result, R1's common stock is no longer publicly traded and the company will cease its reporting obligations to the U.S. Securities and Exchange Commission. Concurrent with the acquisition's closure, Joe Flanagan has been reinstated as CEO of R1, a position he held prior. Financial advisory for the transaction was provided by Qatalyst Partners and Barclays, with legal counsel from Skadden, Arps, Slate, Meagher & Flom and Kirkland & Ellis. TowerBrook and CD&R received financial advice from Centerview Partners and financing from several major banks. TowerBrook and CD&R aim to leverage their investment to drive R1's growth in intelligent automation and customer value creation.
Sectors
- Private Equity
- Healthcare Technology
- Financial Services
Geography
- United States – R1 RCM is a prominent U.S.-based company, and the acquisition involves American investment firms and legal and financial advisors.
- United Kingdom – TowerBrook Capital Partners operates on both sides of the Atlantic, with a key presence in the U.K., which impacts their investment strategies and partnerships.
Industry
- Private Equity – The acquisition of R1 RCM by TowerBrook Capital Partners and Clayton, Dubilier & Rice highlights the role of private equity firms in leveraging investment to drive corporate growth and change.
- Healthcare Technology – R1 RCM operates within the healthcare sector, providing automated revenue management solutions that improve financial performance and patient experience, making it integral to the healthcare technology industry.
- Financial Services – Various financial institutions provided investment and advisory services for the acquisition, showcasing the crucial role financial services play in facilitating large-scale transactions.
Financials
- $8.9 billion – Transaction value for the acquisition of R1 RCM by TowerBrook and CD&R.
- $14.30 per share – Cash value per share offered to shareholders of R1 RCM.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| R1 RCM Inc. | Target company | Company | A premier provider of technology-driven revenue management solutions for healthcare providers. |
| TowerBrook Capital Partners | Bidding Company/Buyer | Company | A transatlantic investment management firm with a focus on delivering superior risk-adjusted returns. |
| Clayton, Dubilier & Rice (CD&R) | Bidding Company/Buyer | Company | A leading private investment firm known for building sustainable businesses. |
| Joe Flanagan | CEO of R1 RCM | Person | Reappointed as CEO of R1 RCM, with extensive management experience and a focus on operational excellence. |
| Qatalyst Partners LP | Financial Advisor to R1 Board | Company | Provided financial advisory services for R1 in the acquisition. |
| Barclays Capital Inc. | Financial Advisor to R1 Board | Company | Engaged in providing financial consultancy for the transaction. |
| Skadden, Arps, Slate, Meagher & Flom LLP | Legal Advisor to R1 Board | Company | Served as legal counsel to R1's Board of Directors. |
| Kirkland & Ellis LLP | Legal Advisor to R1 | Company | Provided legal guidance to R1 during the transaction. |
| Centerview Partners LLC | Lead Financial Advisor to TowerBrook and CD&R | Company | Primary financial advisor for both acquiring firms. |
| Multiple Banks | Financing Providers | Company | Several major banks provided the financial framework for facilitating the acquisition. |