TransUnion offloads its healthcare business to Clearlake Capital-backed nThrive for $1.7B

Credit reporting agency TransUnion plans to sell its healthcare data and analytics business to nThrive and its financial backer Clearlake Capital Group for $1.74 billion in cash.

The deal is expected to close in the fourth quarter this year.

With its revenue cycle management front- and back-end solution suite, TransUnion Healthcare helps hospitals and health systems increase revenue, reduce cost and ensure regulatory compliance.

TransUnion Healthcare will generate $190 million in revenue this year serving 1,850 hospitals and 650,000 physicians.

For nThrive, an RCM platform and software company, the acquisition will create an end-to-end healthcare RCM software and technology platform with patient financial clearance and eligibility capabilities that reduce complexity and drive profitability to allow providers and payers to provide enhanced care, the company said in a press release.

"We have enjoyed a long-standing commercial partnership with TransUnion Healthcare and both organizations are rooted in complementary missions and cultures," Hemant Goel, CEO of nThrive, said in a statement.

RELATED: R1 RCM buys Cerner's revenue cycle outsourcing business for $30M

"nThrive is focused on designing healthcare technology that delivers tangible outcomes for our clients. As we continue on our mission to help eliminate leakage and waste from healthcare revenue cycles, we look forward to bringing TransUnion Healthcare into the fold to serve our clients as a unified and integrated organization," Goel said.

The combined entity will offer healthcare organizations and payers a complete end-to-end RCM technology and software solution, giving customers increased confidence and predictability in payment optimization. 

Chicago-based TransUnion said the deal is expected to bring in $1.4 billion in after-tax proceeds to help prepay debt and fund future M&A transactions that scale its core positions.

TransUnion will now focus on its core businesses of credit, marketing and fraud mitigation solutions.

"There is a long and rich history between these two organizations, and we could not be more excited about the opportunity to create an end-to-end leader in the RCM software and technology category," said Behdad Eghbali, co-founder and managing partner at Clearlake, and Paul Huber, principal at Clearlake, in a joint statement.

"We have been focused on a buy-and-build thesis to scale our SaaS platform investment in nThrive and are eager to leverage Clearlake's O.P.S. framework and resources to support management on this technology platform as they continue to drive meaningful value for clients and execute on accelerated growth plans," Eghbali and Huber said.

Chris Cartwright, president and CEO of TransUnion, said nThrive's leadership in healthcare RCM makes it an "ideal home for the TransUnion Healthcare business." 

"The transaction will also allow TransUnion Healthcare to benefit from ownership whose priorities and expertise are solely focused on healthcare revenue cycle management," Cartwright said.