Inovalon Nears Sale to Nordic Capital, Insight Partners

(Bloomberg) -- Nordic Capital and Insight Partners agreed to buy health-care software company Inovalon Holdings Inc. in a deal valuing the company at $6.4 billion. 

Inovalon investors will get $41 per share in cash, the company said in a statement on Thursday, confirming an earlier Bloomberg News report. Inovalon Chief Executive Officer Keith Dunleavy, 22C Capital and other stockholders also joined the consortium. The deal is subject to approval from investors and U.S. antitrust regulators and may close later this year or in early 2022. 

Shares of Inovalon jumped as much as 8.8% in U.S. trading Thursday. They were up 8.3% to $40.30 at 10:06 a.m. in New York, valuing the company at $6.3 billion and putting it on track to close at a record high. 

A sale would be the latest take-private transaction in a busy year for dealmaking. New York-based growth equity firm Insight Partners, which is known for investing in private technology companies, is becoming more active in acquisitions of listed companies. That included participating in the buyout of CoreLogic Inc. this year. It is also a backer of health-care technology companies such as Eden Health and Clarify Health, according to its website. 

It would also mark the largest acquisition to date for Stockholm-based Nordic Capital, according to data compiled by Bloomberg. Including debt, the takeover values the company at $7.3 billion. 

Founder Controlled

At $41 a share, the private equity firms are paying a premium of 10% above Wednesday’s closing price and about 25% above where the shares were trading before Bloomberg News first reported Inovalon’s advanced sales talks in July.

Inovalon, based in Bowie, Maryland, went public in 2015 in an initial public offering that raised about $685 million. Its founder and CEO, Dunleavy, who is a medical doctor, controls the majority of the company’s voting power, a filing shows. 

The company’s software is used to aggregate and analyze health-care data from researchers and providers, according to its website.

Its database includes information from more than 1 million physicians, 580,000 clinical facilities and 336 million patients. The software is used by all of the top 25 U.S. health plans as well as the world’s top 25 pharmaceutical companies, the company said. 

JPMorgan Chase & Co. advised Inovalon on the sale, while Evercore Inc. worked with the company’s special board committee. Goldman Sachs Group Inc. was lead financial adviser to the private equity consortium, which also worked with Citigroup Inc.

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