Veritas-Backed Cotiviti Weighs IPO at $15 Billion-Plus Value

(Bloomberg) -- Veritas Capital is considering an initial public offering of Cotiviti Corp. that could value the private health-care information and analytics company at more than $15 billion, according to people with knowledge of the matter.

The private equity firm is working with Goldman Sachs Group Inc. and Morgan Stanley on a listing of Atlanta-based Cotiviti as soon as this year, said the people, who asked not to be identified because they weren’t authorized to speak publicly. JPMorgan Chase & Co. is also working on the deal, one of the people said.

A final decision on pursuing an IPO hasn’t been made and New York-based Veritas could decide to sell or keep the company, the people said.

Representatives for Veritas, Goldman Sachs, JPMorgan and Morgan Stanley declined to comment. A representative for Cotiviti didn’t immediately respond to requests for comment.

Cotiviti makes sure payments to doctors and hospitals are accurate and sells its services to payers like commercial health insurers and the government. It says on its website it helps its clients save $5.7 billion in annual medical costs by improving payment accuracy.

Health-care and software companies have done well in an IPO surge this year in which a record of more than $217 billion has been raised on U.S. exchanges, according to data compiled by Bloomberg. While special purpose acquisition companies make up more than half of that total, six health services-related companies have raised $4.9 billion of the total and are up an average of 34% from the offer prices in their IPOs, the data show.

Cotiviti was taken private in 2018 when Veritas-backed Verscend Technologies bought it in a deal valued at $4.9 billion, naming the merged business Cotiviti. Veritas had purchased Verscend from Verisk Analytics for $820 million, according to a statement on Verisk’s website.

In May, Veritas completed a combination of Perspecta Inc., which it had taken private, with a defense-oriented portfolio company, Peraton. Earlier this year, the private equity firm completed its acquisition of Northrop Grumman Corp.’s services business for $3.4 billion, according to a statement in February. Veritas is now seeking to raise $10 billion for its latest flagship fund.

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