Cognizant plans to acquire TriZetto for $2.7 billion in order to drive forward the firm's position in the healthcare industry.
Announced on Monday, the IT, consulting and business process company said a definitive agreement to acquire TriZetto is now in place, subject to customary adjustments.
Englewood, CO-based TriZetto is a provider of IT software and solutions, and is made up of approximately 3,700 employees. Cognizant expects the acquisition to "significantly accelerate" its market position and ability to provide healthcare software and solutions to a wide range of clients, together with new market opportunities. Cognizant says the deal will give the firm access to multiple software platforms, roughly $1.5 billion of potential revenue synergies over the next five years, and will also enhance the firm's overall competitiveness in the healthcare space.
Francisco D'Souza, CEO of Cognizant commented:
"Healthcare is undergoing structural shifts due to reform, cost pressure and shifting responsibilities between payers and providers. This creates a significant growth opportunity, which TriZetto will help us capture.
We are excited that the integrated portfolio of capabilities across technology and operations will uniquely position us to help clients drive higher levels of operational efficiency, while re-imagining care for the future. We look forward to welcoming the TriZetto team into the Cognizant family and creating a truly differentiated and sustainable foundation for healthcare."
Under the terms of the deal, TriZetto's team will become part of Cognizant's existing healthcare business, which serves over 200 clients in the United States.
The acquisition will be funded through a combination of cash and debt, including $1 billion secured through financing. The deal is expected to close in Q4 2014.