Cognizant Technology Solutions Corp (NASDAQ:CTSH), a leading information technology and consulting company with a footprint in healthcare, is purchasing healthcare IT company TriZetto for $2.7 billion to grow that footprint in the lucrative healthcare sector. The move was reported by Andrew Ross Sorkin on CNBC this morning.
“We do have a little bit of breaking news this morning because sources now telling us that Cognizant, the $30 billion company, is buying privately-held healthcare IT company TriZetto for $2.7 billion in cash. TriZetto was taken private you might remember, back in 2008, so it’s been quite awhile lead by Apax Partners. A combined Cognizant, TriZetto will have more than $3 billion in combined healthcare revenue, and serve nearly 245,000 healthcare providers,” Sorkin reported.
Apax, along with minority investors BlueCross BlueShield and Cambia Health Solutions have helped overhaul and streamline TriZetto’s operations since taking it private eight years ago, including building their new healthcare provider-oriented vertical, along with new product offerings, the former of which was particularly attractive to Cognizant Technology Solutions Corp (NASDAQ:CTSH).
Cognizant Technology Solutions Corp (NASDAQ:CTSH) already operates a Healthcare and Life Sciences practice which does about $2.5 billion in annualized revenue, and works with many of the leading healthcare companies in the industry, including some of the top biotech firms, pharmaceutical companies, health care plans, and medical device companies. It’s expected TriZetto and its 3,700 employees will be incorporated into that division.
Cognizant Technology Solutions Corp (NASDAQ:CTSH) and TriZetto have worked together with clients in the past, and have operations that are seen as being very synergistic. The now-strengthened Cognizant Technology Solutions Corp (NASDAQ:CTSH) healthcare division is expected to take in over $3 billion annually and be more strongly positioned for growth in the rapidly changing healthcare industry.
Cognizant Technology Solutions Corp (NASDAQ:CTSH) entered the day’s trading at $44.76 and has spiked 1.36% in early morning trading.