What You Ought to Know:
– Waystar, a supplier of healthcare cost software program introduced a definitive settlement to accumulate 100% of Iodine Software program (“Iodine”) for $1.25B.
– The proposed acquisition is anticipated to considerably speed up Waystar’s potential to rework healthcare funds via its main cloud-based software program platform, empowering multiple million suppliers with superior AI capabilities to stop denials, scale back guide 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 internet revenue per diluted share in 2027.
Addressing Billions in Misplaced Income
Iodine Software program is trusted by lots of the nation’s premier well being programs for its AI-powered medical intelligence software program. As much as $440B in annual administrative prices burden suppliers, with as much as 60 million claims denied annually as a consequence of administrative errors between care supply and submission, costing suppliers billions in misplaced income. This highlights the important function of correct medical documentation and coding in stopping income leakage and underpayments.
Collectively, Waystar and Iodine might be higher positioned to assist lower these administrative prices. Waystar brings a decade-long observe report of making use of AI pervasively throughout its software program platform to simplify healthcare funds, whereas Iodine extends that management into medical intelligence software program. Iodine leverages proprietary AI fashions educated on one of many {industry}’s largest medical 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 guide work, and growing transparency for suppliers and sufferers,” mentioned Matt Hawkins, CEO of Waystar. “We’re dedicated to reworking healthcare via harnessing the ability of AI to sort out essentially the most important challenges in healthcare funds. Welcoming Iodine’s gifted crew and medical intelligence platform to Waystar is a terrific subsequent step in attaining our mission.”
Strategic and Monetary Advantages of the Acquisition
The acquisition presents 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 medical documentation integrity, utilization administration, and prebill income leakage identification. That is anticipated to increase Waystar’s complete addressable market by greater than 15%.
- Accelerates AI Innovation: Integrating Iodine’s distinctive medical knowledge property with Waystar’s expansive knowledge community is anticipated to reinforce the affect and attain of Waystar AltitudeAI™. It will create alternatives to shortly increase Generative AI functions in prior authorizations, claims administration, denial prevention, and appeals. Iodine’s proprietary medical AI engine, IodineIQ, repeatedly trains on hundreds of thousands of affected person encounters and billions of medical knowledge factors to ship related insights.
- Deepens Relationships with Premier Well being Techniques: Iodine brings sturdy 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 absolutely subscription-based income mannequin and vital cross-sell potential. Waystar has recognized greater than $15 million in run-rate value synergies, to be realized inside the first 18-24 months following closing.
Transaction Particulars and Preliminary Q2 2025 Outcomes
The transaction might 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 completely diluted, professional forma foundation, whereas Iodine fairness holders will personal roughly 8%. Creation, 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 robust stability sheet with an estimated adjusted internet leverage ratio at transaction shut of roughly 3.5x. The transaction is anticipated to shut by year-end 2025, topic to customary closing circumstances and relevant regulatory approvals.
Waystar additionally offered preliminary second quarter 2025 outcomes, anticipating income to be roughly $271M, representing roughly 15% year-over-year progress. Waystar will share extra data on its Q2 2025 outcomes on July 30, 2025.
