- Inovalon (Nasdaq: INOV) announced a deal to go private in a $7.3 billion transaction. These are the details.
Inovalon (Nasdaq: INOV) — a leading provider of cloud-based platforms empowering data-driven healthcare — recently announced that it entered into a definitive agreement to be acquired by an equity consortium led by Nordic Capital, and joined by Insight Partners, as lead co-investor, 22C Capital, and Inovalon founder and Chief Executive Officer Keith Dunleavy, M.D. along with certain Class B stockholders of Inovalon in an all-cash transaction with an enterprise value of about $7.3 billion.
Under the terms of the deal, Inovalon stockholders will receive $41 per share in cash for each share of Class A Common Stock or Class B Common Stock — representing a 25.3% premium over the closing price of Inovalon Class A Common Stock on July 26, 2021, the last unaffected trading day prior to media speculation regarding a potential transaction, and a 24.4% premium over the volume-weighted average price of the company’s shares over the 30 trading days leading up to the unaffected trading day.
The independent members of the Inovalon Board of Directors — acting on the unanimous recommendation of a special committee of independent directors that led the consideration of alternatives and the negotiation of the terms of the transaction — had unanimously approved the agreement, which is subject to a number of customary conditions, including a vote of each of Class A and Class B stockholders voting separately. Plus the transaction is subject to approval by a majority of the voting power of Class A and Class B stockholders voting together as a single class, excluding Dr. Dunleavy, certain other Class B stockholders who are providing equity capital for the transaction and their affiliates. Dr. Dunleavy was not a member of the Special Committee and had recused himself from all relevant Board discussions and from the Board vote regarding the transaction.
Upon completion of the deal, Inovalon will become a private company with greater flexibility to focus on strategies that drive innovation and global market development. And Keith Dunleavy, M.D., will continue to be a substantial shareholder in the company, serve on the Board of Directors, lead Inovalon as CEO, and the company will maintain its headquarters in Bowie, Maryland.
The Inovalon Board of Directors had formed a Special Committee composed entirely of independent and disinterested directors to conduct a thorough review of strategic alternatives. And the Special Committee led negotiations with the assistance of independent financial and legal advisors. Following the Special Committee’s unanimous recommendation, the independent members of the Inovalon Board unanimously approved the merger agreement with an entity established by the equity consortium led by Nordic Capital and co-led by Insight Partners and recommend that Inovalon stockholders adopt and approve the merger agreement and the transaction.
Approvals and Timing
The deal is expected to close in late 2021 or early 2022, subject to the satisfaction of customary closing conditions, including stockholder approvals and U.S. antitrust approval. And the transaction is not subject to a financing condition.
“The Inovalon Board regularly evaluates opportunities to enhance stockholder value. Today’s announcement is the culmination of a thorough process of evaluating strategic alternatives and represents a compelling opportunity to deliver immediate and more certain cash value to stockholders at a significant premium. During our evaluation it became clear that not only is the consortium led by Nordic Capital offering our shareholders compelling value, they also have a deep appreciation for Inovalon’s cloud-based platforms and data capabilities, as well as an appreciation for the people, mission, and the value impact of the company.”
— William J. Teuber, Jr., Lead Independent Director of the Board and chair of the Special Committee
“For more than two decades, Inovalon has developed technologies that enable the connectivity, aggregation, and analysis of healthcare data to empower better clinical outcomes and economics across the healthcare ecosystem. We are excited to enter the next chapter in Inovalon’s journey together with such great partners as Nordic Capital, Insight Partners, and 22C Capital. Their significant experience in the areas of software, data, and healthcare is key. This, together with their longer-term focus, operational experience, and international perspective, is an exciting combination for what we see in front of us. We look forward to continuing our mission, together with our greatly appreciated customers, to empower data-driven healthcare.”
— Keith Dunleavy, M.D., Inovalon’s founder, chief executive officer, and chairman of the board
“As a leading healthcare and technology investor, Nordic Capital has long admired Inovalon’s leadership across the healthcare ecosystem and its cloud-based tools leveraging advanced data analytics to meaningfully empower its customers and the patients they serve. As data-driven insights become even more important in improving healthcare, Nordic Capital and its co-investors are committed to supporting Inovalon in continuing to deliver high-value solutions to customers and look forward to partnering with Keith and the Inovalon team in this next phase of the company’s growth journey.”
— Fredrik Näslund, Partner, Nordic Capital Advisors
“At Insight Partners, we work with healthcare IT leaders who define and grow their markets through world-class software, data and innovation. We are excited to support Inovalon, a market leader with a long history of serving customers with powerful data technology as they continue to transform the healthcare ecosystem.”
— Deven Parekh, Managing Director at Insight Partners