UPDATE: Emdeon Inc Said To Acquire Change Healthcare For $135M

Emdeon Inc. today announced it has entered into a definitive agreement to acquire Change Healthcare, a market leader in healthcare consumer engagement and transparency.  Change Healthcare will enable Emdeon to offer its customers additional solutions that marry cost and quality information with a robust inventory of consumer behavioral insights.  These solutions can help employees, health plan members and patients reduce costs and become better healthcare consumers. "Our customers are prioritizing information, insights and capabilities that enable individuals to be better healthcare consumers," said Neil de Crescenzo, Emdeon president and CEO. "While Emdeon has assisted payers, providers, pharmacies and our partner network with cost management, efficiency and maximizing revenues for many years, the addition of Change Healthcare's innovative, proven capabilities will further accelerate our customers' success. By combining our connectivity and scale with Change Healthcare's transparency and personalization capabilities, we can help our customers further increase member and patient engagement and add even more value to the services they provide their customers." Emdeon is the largest financial, administrative and clinical health information network in the nation, processing more than seven billion transactions with a claims value of $1 trillion annually.  Emdeon's Intelligent Healthcare Network™ reaches 700,000 physicians, 81,000 dentists, 60,000 pharmacies, 5,000 hospitals, 600 vendors, 450 laboratories and 1,200 government and commercial payers. Change Healthcare president & CEO Doug Ghertner added, "Within the complex healthcare landscape, consumers are faced with increasing costs and more choices than ever.  This transaction reinforces our commitment to transparency and consumer engagement and will enable us to deliver even more comprehensive, accurate and timely information to our users.  By joining the Emdeon team, we will have access to the resources necessary to accelerate our growth and to become the premier platform for consumer engagement in healthcare." Change Healthcare was founded to transform the way consumers evaluate and utilize healthcare services by combining unique insights at the point of decision with sustainable engagement. With a national customer base of health plans and employers and more than 10 million lives under contract, Change Healthcare is a leading provider of healthcare consumer engagement and value-based healthcare solutions that enable consumers to: o better understand and utilize their healthcare benefits and options; o receive proactive insights on a dynamic basis at critical decision points; o make informed healthcare purchasing decisions based on quality, cost and convenience; and o manage their out-of-pocket responsibility and realize savings. Consumers continue to enroll in high deductible health plans at a rapid pace.  Over 80% of employers now offer these plans and nearly 40% of employees have deductibles of $1,000 or more.  In addition, an increasing number of healthcare consumers are choosing their benefits through public and private health insurance exchanges. These plans offer more flexibility but often have higher out of pocket expenses, requiring consumers to better understand their healthcare benefits and find ways to maximize the value of their healthcare spend.  As a result, consumers increasingly need accurate cost and quality information before treatment as they learn to "shop" for affordable healthcare.  Creating improved consumer and provider access to cost and quality data at the point of care is a core component of any value-based healthcare delivery system and will have a significant impact on on-going healthcare expenses.  Like Emdeon, Change Healthcare is headquartered in Nashville, Tennessee. The rapidly growing team at Change Healthcare will join Emdeon and form the core of the company's healthcare consumer engagement business.  The business will be led by Change Healthcare's president and CEO, Doug Ghertner, who will report directly to Emdeon's CEO. Emdeon will acquire Change Healthcare, a privately held company, for approximately $135 million in cash payable at closing, plus additional contingent payments of up to $50 million based upon the attainment of financial performance objectives of the acquired business through the end of 2017. The purchase price will be paid with a combination of available cash and funds under Emdeon's revolving senior credit facility. The acquisition is subject to customary closing conditions and is expected to close later this month.