Atlanta-based Cloudmed, a revenue intelligence solution backed by private equity firm New Mountain Capital, works with more than 400 of the largest health systems in the U.S. and recovers more than $1.5 billion of underpaid or unidentified revenue for its clients each year.
Under the deal, approved by both boards, current R1 shareholders will own about 70 percent of the combined company, and Cloudmed equity holders will own the rest.
R1 RCM CEO Joe Flanagan will serve as CEO of the combined company. Lee Rivas, CEO of Cloudmed, will serve as president of the combined company. R1 would also add three new board members nominated by New Mountain Capital.
“This transaction accelerates our strategy to build the most scalable, flexible and integrated platform for the revenue cycle and consumer engagement in healthcare,” Mr. Flanagan said in a news release. “Our combined solutions, including enhanced automation capabilities, will further transform the patient experience and drive continued improvement in our customers’ financial results.”
The companies expect the transaction to close in the second quarter of this year.
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