What You Ought to Know:
– Waystar, a supplier of healthcare fee software program introduced a definitive settlement to acquire 100% of Iodine Software (“Iodine”) for $1.25B.
– The proposed acquisition is anticipated to considerably speed up Waystar’s skill to rework healthcare funds by way of its main cloud-based software program platform, empowering a couple of million suppliers with superior AI capabilities to forestall denials, cut back handbook work, and enhance monetary efficiency.
– Waystar expects the acquisition of Iodine to be instantly accretive to gross margin and adjusted EBITDA margin, and accretive to income progress and non-GAAP web earnings per diluted share in 2027.
Addressing Billions in Misplaced Income
Iodine Software program is trusted by most of the nation’s premier well being programs for its AI-powered scientific intelligence software program. As much as $440B in annual administrative prices burden suppliers, with as much as 60 million claims denied every year as a consequence of administrative errors between care supply and submission, costing suppliers billions in misplaced income. This highlights the important function of correct scientific documentation and coding in stopping income leakage and underpayments.
Collectively, Waystar and Iodine shall be higher positioned to assist lower these administrative prices. Waystar brings a decade-long monitor file of making use of AI pervasively throughout its software program platform to simplify healthcare funds, whereas Iodine extends that management into scientific intelligence software program. Iodine leverages proprietary AI fashions skilled on one of many {industry}’s largest scientific datasets, representing greater than a 3rd of all U.S. inpatient discharges.
“Our mission is to simplify healthcare funds by eradicating pointless denied claims, automating handbook work, and growing transparency for suppliers and sufferers,” stated Matt Hawkins, CEO of Waystar. “We’re dedicated to reworking healthcare by way of harnessing the ability of AI to deal with probably the most important challenges in healthcare funds. Welcoming Iodine’s gifted group and scientific intelligence platform to Waystar is a terrific subsequent step in reaching our mission.”
Strategic and Monetary Advantages of the Acquisition
The acquisition gives a number of strategic and monetary advantages:
- Unlocks Transformational Outcomes: Waystar expects to unlock new automation all through its platform, leveraging Iodine’s industry-leading AI capabilities in scientific documentation integrity, utilization administration, and prebill income leakage identification. That is anticipated to broaden Waystar’s whole addressable market by greater than 15%.
- Accelerates AI Innovation: Integrating Iodine’s distinctive scientific knowledge property with Waystar’s expansive knowledge community is anticipated to boost the influence and attain of Waystar AltitudeAI™. This can create alternatives to shortly broaden Generative AI functions in prior authorizations, claims administration, denial prevention, and appeals. Iodine’s proprietary scientific AI engine, IodineIQ, repeatedly trains on thousands and thousands of affected person encounters and billions of scientific knowledge factors to ship related insights.
- Deepens Relationships with Premier Well being Methods: Iodine brings robust adoption and credibility amongst main hospitals and well being programs, increasing Waystar’s scale and deepening relationships with premier suppliers. The mixed firm is anticipated to serve 17 of the 20 U.S. Information Finest Hospitals.
- Strengthens Monetary Profile: Waystar will profit from Iodine’s totally subscription-based income mannequin and vital cross-sell potential. Waystar has recognized greater than $15 million in run-rate price synergies, to be realized throughout the first 18-24 months following closing.
Transaction Particulars and Preliminary Q2 2025 Outcomes
The transaction shall be funded with a 50/50 combine of money and inventory consideration. Upon closing, present Waystar shareholders will personal roughly 92% of the mixed firm on a totally diluted, professional forma foundation, whereas Iodine fairness holders will personal roughly 8%. Introduction, Iodine’s largest shareholder, is anticipated to solely obtain Waystar shares and can comply with be locked up for 18 months after closing.
Waystar expects to keep up a powerful stability sheet with an estimated adjusted web leverage ratio at transaction shut of roughly 3.5x. The transaction is anticipated to shut by year-end 2025, topic to customary closing situations and relevant regulatory approvals.
Waystar additionally supplied preliminary second quarter 2025 outcomes, anticipating income to be roughly $271M, representing roughly 15% year-over-year progress. Waystar will share further data on its Q2 2025 outcomes on July 30, 2025.
