Affiliates of Signify Health and Remedy Partners, both portfolio companies of New Mountain Capital, have signed a definitive agreement to merge, leading to a platform focused on advancing value-based care by leveraging clinical, behavioral and social data.
This comes amidst an accelerating market shift from fee-for-service toward value-based payments and arrangements based on the quality and total cost of care for a patient.
While financial terms of the deal were not disclosed, the forecast is that combined revenue will top $600 million, with strong double-digit revenue growth. In a statement, the companies said the combined business will allow for accelerated innovation and growth across the provider, payer and life sciences markets.
Learn on-demand, earn credit, find products and solutions. Get Started >>
WHAT'S THE IMPACT
The companies say the combination will provide value-based care solutions to organizations across health systems, provider groups, health plans and life sciences companies -- bringing together a platform of technology, data, and network assets focused on enabling the right care for millions of members at scale.
With a combined national force of more than 9,000 credentialed providers, and a combined nationwide partner network of more than 300 provider systems, 2,000 post-acute organizations and 200-plus community locations, the businesses see over one million members annually in the home, have managed over 600,000 episodes of care and have addressed over 25 million social determinants of health activities for about three million members.
The businesses typically equip this network of providers with mobile and web-based tools aimed at efficiently delivering care for members -- leveraging insights from a data chassis that integrates clinical, social and behavioral data around a member as they are seen across various sites of care.
With a more longitudinal view and holistic engagement across settings, they'll focus on improved coordination of care to reduce excess costs, and hope to drive a higher quality experience for members.
Remedy CFO Steve Senneff will serve as president and CFO of the combined businesses.
THE LARGER TREND
The volume of mergers and acquisitions ticked back up during the second quarter of this year, and hit a milestone of sorts: It marked the eighth straight quarter in which volume topped 250 deals.
In all, that's good for a 7.3% increase from the first quarter, according to the latest report from PricewaterhouseCoopers. The value of those deals also showed a significant increase -- 10.3% higher than the average of the seven quarters that preceded it.
ON THE RECORD
"A fundamental change is underway in healthcare and patients stand to benefit because their experience is now at the center of reform," said Signify Health CEO Kyle Armbrester, who will lead the combined businesses as CEO. "Organizing and financing healthcare around a patient's episode of care lowers costs and improves quality, allowing providers to move toward a value-based approach, but making the shift is challenging without analytic support, workflow and decision support software, and an innovative approach to care delivery. Leveraging Signify's provider network in the home and community around episodes of care creates new opportunities to truly transform the way healthcare is delivered."
"Both Signify and Remedy have scaled disruptive approaches to healthcare delivery, achieving impressive growth and penetration in their respective markets," said Matt Holt, deputy head of private equity at New Mountain Capital. "With the convergence of those markets around value-based care delivery, we believe this combination results in a compelling set of complementary assets that are well-positioned to help payer and provider organizations succeed in managing value-based care. We look forward to building out this vision of bringing better coordinated care and improved quality of life to members as we continue our work with management."