R1 to Acquire Providence’s RCM Company Acclara
R1 RCM entered a definitive agreement to purchase Acclara from Providence for $675M in a deal expected to close early next year.
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By - R1 RCM Inc. recently announced plans to acquire the technology-driven revenue cycle management company Acclara from Providence.
The revenue cycle management solutions vendor signed a definitive agreement to purchase Acclara last week. The deal amounts to $675 million in cash. R1 also warrants to purchase 12.2 million shared of its stock at a strike price of $10.52, including a three-year lock-up.
R1 also said Providence will use it as its long-term revenue cycle management partner following the closing of the deal. According to the announcement, Providence chose R1 after a “competitive process and represents the first major cross-sell of a strategic partnership from the Cloudmed customer base,” which involves nearly all of the top 100 health systems in the US.
The vendor expects to close the deal in early 2024 after customary closing conditions, including regulatory approvals and the entry of Providence and Acclara into the ten-year revenue cycle management agreement.
Providence is one of the largest health systems in the US with 51 hospitals and more than 1,000 physician clinics, senior services, supportive housing, and other services in the seven western states. The health system formed Acclara in 2020 to provide cost-effective, high-quality revenue cycle management solutions to providers. Acclara employs 2,600 skilled professionals to support cash flow improvements, minimize administrative burden, and maintain regulatory compliance for clients.
Acclara was later rolled into Providence’s Tegria, a combination of nine of Providence’s investments and acquisitions. Tegria includes a couple of revenue cycle management solutions in addition to Acclara: MediRevv and Medical Specialties Manager.
R1 said the acquisition of Acclara provides a foundation for the vendor to continue revenue cycle management automation and increase the company’s scale and diversification. Providence’s selection of R1 as its revenue cycle management partner also highlights the company’s strengths, the vendor explained in the announcement.
“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 Lee Rivas, CEO of R1.
“Providence is a pioneer of quality and compassionate faith-based care, and we are proud to work with Providence to be their trusted long-term partner to drive operational excellence and provide patients with affordable, high-quality care. We look forward to welcoming Acclara to R1,” Rivas continued.
Providence CFO Greg Hoffman said the health system has enhanced its own revenue cycle management assets and capabilities to support patient care and its selection of R1 is expected to accelerate those capabilities.
“After a careful evaluation, we are confident that R1 is the right partner to accelerate our vision, helping Providence ensure a best-in-class, compassionate revenue cycle experience for our patients. We are also proud of what the team at Acclara has built and are confident that they are positioned for continued success as part of R1,” Hoffman explained.
