Bizness Lounge

Cognizant to Buy TriZetto for $2.7 Billion

By Tom Lavell  

Cognizant Technology Solutions Corp. (CTSH) agreed to buy TriZetto Corp. from Apax Partners for $2.7 billion in an all-cash deal to expand in health-care industry software.
Cognizant has arranged $1 billion in financing to back the purchase, the Teaneck, New Jersey-based company said today in a statement. Additional revenue and savings will total about $1.5 billion in the next five years, the company said. Minority shareholders BlueCross BlueShield of Tennessee and Cambia Health Solutions will also sell their stakes in closely held TriZetto, Apax said in a separate statement.
“Health care is undergoing structural shifts due to reform, cost pressure and shifting responsibilities between payers and providers,” Cognizant Chief Executive Officer Francisco D’Souza said in the statement. “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.”
TriZetto, based in Englewood, Colorado, was acquired by Apax for $1.19 billion in 2008. The company serves about 350 health-care plans and supplies software to almost 245,000 doctors and other care providers. Cognizant said its health-care division currently has about 200 customers and represents about 26 percent of the technical-services provider’s revenue, which last year totaled $8.84 billion.

Photographer: Daniel Acker/Bloomberg

Cognizant Chief Executive Officer Francisco D’Souza said, “Health care is undergoing... Read More

The companies already serve “a number of” clients in common, Cognizant said. The transaction is expected to be completed during the fourth quarter.
JPMorgan Chase & Co. and Goldman Sachs served as financial advisers to TriZetto and Kirkland & Ellis LLP is acting as legal adviser. Cognizant was advised by Credit Suisse, UBS Securities LLC and Centerview Partners. Legal counsel to Cognizant was provided by Latham & Watkins LLP and Nishith Desai Associates.