R1 RCM (NASDAQ:RCM) surged 9% higher in premarket trading Thursday after the revenue cycle management company agreed to be taken private by TowerBrook Capital Partners and Clayton, Dubilier & Rice for $14.30 per share.
The deal values R1 RCM at approximately $8.9 billion.
The offered price per share represents a 29% premium over R1 RCM’s closing stock price on February 23, the day before New Mountain Capital disclosed its initial non-binding acquisition proposal.
The transaction has received unanimous approval from a special committee of R1's Board of Directors, composed exclusively of independent directors.
This Special Committee, formed on March 11, 2024, to evaluate strategic alternatives, led the transaction negotiations with the help of independent legal and financial advisors. Following the Special Committee's recommendation, 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.”
After the deal is completed, R1 will become a private company, and its shares will no longer be traded on Nasdaq.
The transaction is expected to close by the end of the year, pending customary conditions such as stockholder and regulatory approvals. Financing will be provided through a combination of committed debt and equity from investment funds associated with TowerBrook and CD&R.