ATLANTA--(BUSINESS WIRE)--Cotiviti Holdings Inc. (NYSE:COTV) (“Cotiviti”), a leading provider of analytics-driven payment accuracy solutions primarily focused on the healthcare industry, today announced that it has entered into a definitive agreement to acquire RowdMap, Inc. (“RowdMap”). Based in Louisville, Kentucky, privately-held RowdMap is a payer-provider, value-based analytics company. The acquisition broadens Cotiviti’s data analytics capabilities and provides adjacent solutions to address the overall healthcare market shift from volume to value.
“The trend toward value-based care increases the complexity associated with payment and creates a greater need for Cotiviti’s payment accuracy services,” said Doug Williams, Cotiviti’s Chief Executive Officer. “With the addition of RowdMap, we will be able to offer adjacent solutions to payment accuracy that together target over $600 billion of the estimated $900+ billion in waste and abuse in healthcare expenditures. Cotiviti can now offer our health plan clients an even more comprehensive portfolio of solutions to address medical and payment policies, provider network and contract management, and value-based care and reimbursement models. Together, we will be able to provide differentiated value to our clients through enhanced capabilities and expanded solutions.”
RowdMap was founded in 2011 and helps health plans and providers identify and reduce low-value care from inefficient and unnecessary services. Their Risk-Readiness® Platform develops benchmarks for nearly every physician, hospital and zip code in the United States by applying a proprietary analysis against data sources including comprehensive CMS information, clinical policies, health guidelines and value-based analytics to evaluate provider performance across multiple dimensions. Based on these benchmarks, RowdMap develops a Risk-Readiness® Network Efficiency Score to measure the efficiency of a provider network. Payer clients can then use a series of analytic solutions to develop specific action plans to improve their Risk-Readiness® Network Efficiency Score, which can drive quantifiable medical cost savings through higher performing provider networks, improved member adherence and value-based contracting strategies.
Williams continued, “We believe we are well positioned to help RowdMap achieve its full potential by leveraging our broad data set and established client relationships. In addition, the RowdMap technology platform and analytics are highly complementary with Cotiviti’s, creating an opportunity for our teams to collaborate and share mutual insights to enhance existing solutions and develop a new set of innovative solutions.”
“RowdMap is very excited to join with Cotiviti,” said Melanie Rosenthal, RowdMap’s Chief Executive Officer. “Together we offer complementary solutions that provide tangible medical cost improvements. In addition to a shared commitment and focus on delivering results to our clients, our common values and missions unite us as we collaboratively work to improve the healthcare system by reducing unnecessary costs and supporting the transition from volume to value.”
“We are very enthusiastic about the opportunities that Cotiviti’s combination with RowdMap presents, both strategically and financially,” concluded Williams.
Pursuant to the definitive agreement, Cotiviti will pay $70 million in cash, subject to certain adjustments. The transaction is not subject to a financing condition and Cotiviti intends to fund the entire purchase price with available liquidity. Cotiviti also intends to issue an aggregate of approximately 800,000 shares of restricted Common Stock to certain employees of RowdMap as a material inducement to their employment with Cotiviti, and in reliance on New York Stock Exchange Rule 303A.08. Half of these shares are subject to performance-based vesting requirements. The other half are subject to continued employment with Cotiviti, with one-third vesting on each of the first three anniversaries of the closing of the acquisition. The transaction is expected to close by the end of July 2017.
Due to the equity incentives and impact of purchase accounting, on a GAAP net income basis the acquisition is not expected to be accretive in 2017 or 2018. On a non-GAAP adjusted net income basis, the acquisition is expected to be neutral to full year 2017 results and accretive in 2018.
Legal counsel to Cotiviti was provided by Weil, Gotshal & Manges LLP. RowdMap was advised by Leerink Partners, and legal counsel was provided by Wyatt, Tarrant & Combs.
About Cotiviti
Cotiviti is a leading provider of payment accuracy and insight driven solutions that helps healthcare payers and retailers achieve their business objectives by unlocking value from the incongruities the company discovers in the complex interactions customers have with stakeholders. Cotiviti helps clients capture over $3.7 billion annually through improved payment accuracy. Cotiviti provides services to over twenty of the top twenty-five U.S. healthcare payers and eight of the top ten U.S. retailers. To learn more, http://www.cotiviti.com.
About RowdMap
RowdMap is a payer-provider, value-based analytics company employing Risk-Readiness® Benchmarks to assist health plans, physician groups, and hospital systems identify, quantify, and reduce low-value care. Payers and physicians use RowdMap’s physician and population health benchmarks to create strategies that put the highest performing physicians at the center of networks and then design products, organize clinical programs, and coordinate sales and marketing around them. To learn more, http://www.rowdmap.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties. All statements other than statements of historical fact or relating to present facts or current conditions included in this press release are forward-looking statements. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “seek,” “plan,” “intend,” “believe,” “will,” “may,” “could,” “continue,” “likely,” “should,” and other words.
The forward-looking statements contained in this press release are based on assumptions that we have made in light of our industry experience and our perceptions of historical trends, current conditions, expected future developments and other factors that we believe are appropriate under the circumstances. These statements are not guarantees of performance or results. These assumptions and our future performance or results involve risks and uncertainties (many of which are beyond our control). Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions and the following: our inability to successfully leverage our existing client base by expanding the volume of claims reviewed and cross-selling additional solutions; improvements to healthcare claims and retail billing processes reducing the demand for our solutions or rendering our solutions unnecessary; healthcare spending fluctuations; our clients declining to renew their agreements with us or renewing at lower performance fee levels; inability to develop new clients; delays in implementing our solutions; system interruptions or failures, including cyber-security breaches, identity theft or other disruptions that could compromise our information; our failure to innovate and develop new solutions for our clients; our failure to comply with applicable privacy, security and data laws, regulations and standards; changes in regulations governing healthcare administration and policies, including governmental restrictions on the outsourcing of functions such as those that we provide; loss of a large client; consolidation among healthcare payers or retailers; slow development of the healthcare payment accuracy market; negative publicity concerning the healthcare payment industry or patient confidentiality and privacy; significant competition for our solutions; our inability to protect our intellectual property rights, proprietary technology, information, processes and know-how; compliance with current and future regulatory requirements; declines in contracts awarded through competitive bidding or our inability to re-procure contracts through the competitive bidding process; our failure to accurately estimate the factors upon which we base our contract pricing; our inability to manage our growth; our inability to successfully integrate and realize synergies from any future acquisitions or strategic partnerships including our acquisition of RowdMap; our failure to maintain or upgrade our operational platforms; our failure to re-procure our Medicare Recovery Audit Contractor program contract; litigation, regulatory or dispute resolution proceedings, including claims or proceedings related to intellectual property infringements; our inability to expand our retail business; our inability to manage our relationships with information suppliers, software vendors or utility providers; fluctuation in our results of operations; changes in tax rules; risks associated with international operations; our inability to realize the book value of intangible assets; our success in attracting and retaining qualified employees and key personnel; and general economic, political and market forces and dislocations beyond our control; risks related to our substantial indebtedness and holding company structure; volatility in bank and capital markets; our status as a controlled company and as an emerging growth company; and provisions in our amended and restated certificate of incorporation. Additional factors or events that could cause our actual performance to differ from these forward-looking statements may emerge from time to time, and it is not possible for us to predict all of them. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, our actual financial condition, results of operations, future performance and business may vary in material respects from the performance projected in these forward-looking statements.
Any forward-looking statement made by us in this press release speaks only as of the date on which it is made. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
