Waystar, a provider of healthcare payment software, has announced a definitive agreement to acquire Iodine Software from shareholders led by Advent International for a total enterprise value of $1.25 billion.
This deal is expected to enhance Waystar’s ability to transform healthcare payments through its cloud-based software platform, benefiting over one million providers with advanced AI capabilities to prevent claim denials, reduce manual tasks, and improve financial performance.
Iodine, known for its AI-powered clinical intelligence software, helps address the annual denial of up to 60 million claims due to administrative errors, costing providers billions. The collaboration aims to reduce the estimated $440 billion in annual administrative costs affecting providers by expanding Waystar’s total addressable market by over 15%.
Waystar anticipates immediate improvements in gross margin, adjusted EBITDA margin, revenue growth, and non-GAAP net income per diluted share by 2027. The integration of Iodine’s clinical data with Waystar’s network is expected to enhance its AltitudeAI capabilities and create opportunities for generative AI applications in various areas.
The deal will be funded with a mix of cash and stock, resulting in current Waystar shareholders owning approximately 92% of the combined company and Iodine equity holders owning roughly 8%. Advent, Iodine’s largest shareholder, will receive Waystar shares and will be subject to an 18-month lock-up after closing.
Waystar is projected to maintain a strong balance sheet with an estimated adjusted net leverage ratio of approximately 3.5x upon closing. The deal is expected to close by the end of 2025, subject to customary conditions and receipt of all necessary regulatory approvals.
Advisors: Barclays is serving as the exclusive financial advisor, and Simpson Thacher & Bartlett is serving as the legal advisor to Waystar. J.P. Morgan Securities is serving as exclusive financial advisor, and Weil, Gotshal & Manges LLP and Queen Saenz + Schultz are serving as legal advisors to Iodine.
KEY QUOTES:
“Our mission is to simplify healthcare payments by eradicating unnecessary denied claims, automating manual work, and increasing transparency for providers and patients. We are committed to transforming healthcare through harnessing the power of AI to tackle the most critical challenges in healthcare payments. Welcoming Iodine’s talented team and clinical intelligence platform to Waystar is a terrific next step in achieving our mission.”
Matt Hawkins, Chief Executive Officer of Waystar
“We are proud to have built a market-leading AI software company in partnership with Advent, Bain Capital Ventures, and Silversmith Capital Partners, and are thrilled to join Waystar, an organization that shares our deep commitment to modernizing the revenue cycle for providers. From day one, our focus has been helping hospitals and health systems capture the full value of care through transformational AI. As part of Waystar, we are excited to accelerate that mission and amplify the value delivered to healthcare providers.”
William Chan, Co-Founder and Chief Executive Officer of Iodine Software
“Our success has been driven by strong partnerships, continuous innovation, and meaningful outcomes. We look forward to delivering even greater outcomes for providers as part of Waystar’s market-leading platform.”
Mike Kadyan, Co-Founder and Chairman of Iodine Software
“It has been a privilege to partner alongside the Iodine team as they have built a category-defining AI-powered revenue cycle platform consistently delivering exceptional ROI to its clients. We are excited to build on that foundation together with Waystar to drive even greater impact across healthcare, empowering organizations to optimize their financial performance.”
Lauren Young and Carmine Petrone, Managing Directors at Advent
