EQT Partners, CPPIB to Buy Majority Stake in Bain’s Waystar

(Bloomberg) -- Buyout firm EQT Partners and Canada Pension Plan Investment Board reached an agreement with Bain Capital to buy a majority stake in its Waystar business in a deal valuing the health-care technology company at $2.7 billion.

The transaction is expected to close this year, according to a statement confirming an earlier report by Bloomberg. EQT will be Waystar’s controlling shareholder, said people familiar with the matter who asked not to be identified because that detail wasn’t public.

The deal would be one in a surge of health-care technology company transactions in the past year. Bain plans to retain a minority holding in the business following the transaction, according to the statement.

“By partnering with CPPIB, we have the unfettered ability to go pursue transformational acquisitions that make sense regardless of size -- that’s why we decided to partner with them,” EQT partner Eric Liu said in an interview.

EQT and CPPIB plan to make Waystar a major consolidator in the fragmented health-care technology sector, Liu said. He said EQT was attracted to Waystar because it straddles two relatively recession-proof industries: health care and software.

450,000 Providers

Bain created Waystar in 2017 by combining Navicure and ZirMed. Waystar, based in Louisville, Kentucky, makes software that helps more than 450,000 health-care providers manage payments by navigating the reimbursement and payments system for patients, hospitals and insurers.

“Since our acquisition of Navicure in 2016, the business has grown significantly driven by new product innovation, market share gain, and the acquisition of several new products into the technology platform,” David Humphrey, a Bain managing director, said in an emailed statement.

The investment will accelerate Waystar’s ability to deliver value to clients and partners, Waystar Chief Executive Officer Matt Hawkins said in the statement.

“We are thrilled to welcome two new growth-oriented investors, EQT and CPPIB, as our partners and to continue our excellent partnership with Bain Capital,” Hawkins said.

The deal comes as Bain has been in talks to buy a minority stake in two other health-care technology companies, Zelis Healthcare and RedCard, which are being combined by owner Parthenon Capital, people familiar with the matter said earlier this month.

Ares, Leonard Green

Other private equity equity firms are also looking toward health care’s data and information technology segment. A group led by Ares Management Corp. and Leonard Green & Partners agreed to buy health-survey business Press Ganey Associates Inc. from EQT in June. The deal valued the company at more than $4 billion, people with knowledge of the matter had said.

Also in June, UnitedHealth Group Inc. agreed to buy health-care payments business Equian LLC for $3.2 billion, people familiar with the matter said at the time. Veritas Capital and Elliott Management Corp. agreed last year to buy Athenahealth Inc. for $5.7 billion.

In the Waystar deal, EQT was advised by Barclays Plc and Triple Tree and Simpson Thacher & Bartlett LLP provided legal counsel, according to the statement. JPMorgan Chase & Co. and Deutsche Bank AG provided financial advice to Bain. Ropes & Gray LLP served as Bain’s legal counsel.

--With assistance from Gillian Tan.

To contact the reporters on this story: Nabila Ahmed in New York at nahmed54@bloomberg.net;Kiel Porter in Chicago at kporter17@bloomberg.net

To contact the editors responsible for this story: Liana Baker at lbaker75@bloomberg.net, Michael Hytha, Matthew Monks

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