EQT Partners and the Canadian Pension Plan buy majority stake in Waystar in $2.7B deal

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Private equity deals in healthcare rose 50% to $63.1 billion in 2018. (Getty Images)

Revenue cycle management technology company Waystar has new majority owners as the result of a deal between Bain Capital to sell a majority stake to Swedish global investment firm EQT Partners and the Canadian Pension Plan Investment Board.

The deal values the healthcare technology company at $2.7 billion. Bain Capital will retain a minority stake in the company.

The transaction is expected to close this year, according to the companies. EQT Partners will be Waystar’s controlling shareholder, Bloomberg reported.

Waystar was formed in 2017 by the merger of revenue cycle management companies Navicure and ZirMed. The company, renamed Waystar in February 2018, provides revenue cycle management software-as-a-service designed to improve and streamline billing, claims and patient payment processes. The company serves more than 450,000 providers, 750 health systems and 5,000 payers and health plans, the company said.

RELATED: Waystar continues buying spree with acquisition of prior authorization company Digitize.AI

In the past year, Waystar has acquired and integrated several analytics solutions providers starting with Connance back in September. That deal was followed by Waystar's acquisition of the transaction services technology business—specifically claims monitoring capabilities—owned by Ovation Revenue Cycle Services, part of healthcare provider and insurer UPMC. 

Earlier this year Waystar bought PARO, a company that uses predictive analytics to fast-track recommendations for potential charity-care cases at nonprofit hospitals. Most recently Waystar acquired Charlotte, N.C.-based startup Digitize.AI, a company that applies artificial intelligence to the prior authorization process. 

EQT and CPPIB's investment will support Waystar's continued growth and will build on the company's successful track record in acquiring and integrating leading technologies to strengthen its product platform, the companies said in a press release.

Matt Hawkins, CEO of Waystar, said the new investment will accelerate the company's ability to deliver value to clients and partners. "Waystar's mission is to simplify and unify the healthcare payment process with best in class cloud technology so that providers can focus on what really matters—patient care," Hawkins said in a statement.

RELATED: Healthcare private equity deals reach record levels in 2018

Eric Liu, Partner at EQT Partners, said the private equity group sees Waystar's tremendous growth potential. Waystar sits at the intersection of technology and healthcare, two of EQT's core investment sectors, Liu said.

Private equity firms see a ripe opportunity in healthcare and health technology and infused the healthcare sector with $63.1 billion in investments in 2018, up 50% from 2017. 

A group led by Ares Management Corp. and Leonard Green & Partners agreed to buy Press Ganey Associates, a patient survey business, from EQT in June. Investment firm KKR acquired Envision Healthcare Corp. in a deal worth nearly $10 billion last year. Another big deal was Evergreen Coast Capital and Veritas Capital's acquisition of Athenahealth for $5.7 billion in 2018.

Barclays and Triple Tree acted as financial advisors to EQT, and Simpson Thacher & Bartlett LLP provided legal counsel. J.P. Morgan and Deutsche Bank acted as financial advisors to Bain Capital.