-Rhapsody acquisition completed, Population Health investment secured
BOSTON, Oct. 31, 2018 /PRNewswire/ — Orion Health (NZX:OHE/ASX:OHE) today announced the completion of its transaction with technology investor Hg for the acquisition of Rhapsody and a 24.9% stake in Orion Health’s Population Health Management business. Orion Health retains a 24.9% investment in the Rhapsody business and remains a majority owner of its Population Health business at 75.1%.
This is a significant milestone for Orion Health, signalling the next chapter for the company as a global technology leader in Population Health, while laying the foundations for precision medicine, which the company believes will transform the global healthcare sector.
Orion Health’s partnership with Hg, a specialist technology investor with deep healthcare expertise, delivers a combination of investment and a global network to Orion Health. It also provides a stronger platform for Orion Health to continue to deliver long-term value to customers, enabling the company to focus on its core business of Population Health and build on its global growth.
“We have achieved a significant milestone today with Hg’s acquisition of Rhapsody and an investment in Population Health. Hg is a deeply knowledgeable and globally connected investor in healthcare technology, which gives Orion Health enormous leverage in the healthcare technology market,” said Ian McCrae, Founder and CEO of Orion Health.
“We’re shifting to a world where data is enabling clinicians to extract meaningful insights and make more accurate decisions. The injection of capital accelerates Orion Health’s product roadmap to deliver innovation which will enable healthcare organizations to take advantage of their large data stores, using analytics and machine learning models.
“We are immensely proud of the Rhapsody technology our engineers have built and supported over the years and couldn’t be more excited for the team globally and the opportunity they will have to accelerate the growth of the business. We remain committed to the Rhapsody business, not only as an ongoing shareholder, but also as a partner and reseller, working closely together with Hg in the transition and its future growth,” said McCrae.
Orion Health’s focus on its Population Health technology roadmap combined with its cloud capability will help healthcare organizations be part of a more secure and streamlined data journey toward precision medicine while delivering fast, secure data across their systems, exponentially increasing software quality and development times, and meeting compliance, privacy and regulatory requirements.
“The greatest transformation of the healthcare sector will come from the use of technology and the collection and analysis of people’s health data,” said McCrae, adding, “The advancements in data analytics and machine learning will enable us to securely connect huge amounts of data and extract valuable insights so we can drive the shift to personalized healthcare.”
“Interoperability and data liquidity are major issues in healthcare technology worldwide,” said David Issott, Partner at Hg. “Rhapsody has been built over the last 20 years to provide a solution. It is a world class product, used by over 460 clients in almost every major healthcare market in the world. By partnering with the Rhapsody team, we will accelerate its growth by investing in its products, capabilities and service levels.
“In addition, we are delighted to be co-investing in Population Health, whose innovative products help health economies deliver high quality and targeted care within tight fiscal constraints,” said Issott.
Summary of Hg Transaction
(Currency in New Zealand Dollars)
- Orion Health will operate as three separate businesses.
- Hg will acquire Orion Health’s Rhapsody business for $205 million, with Orion Health applying approximately $28 million of the proceeds to retain a 24.9% stake in the Rhapsody business.
- Hg will also take a 24.9% stake in Orion Health’s Population Health Management business by investing approximately $20 million of equity.
- Orion Health will invest around $12 million of the Rhapsody Sale proceeds in Population Health Management, based on an agreed pre-cash enterprise value of $50 million, with an additional $30 million of net cash to fund ongoing operations.
- The Hg Transaction implies an enterprise value of $255 million for Orion Health. Following completion, Orion Health will own 75.1% of Population Health Management and 24.9% of Rhapsody. Hg will own the inverse proportions in each business. Orion Health will continue to own 100% of its Hospitals business.
About Orion Health
Orion Health (NZX:OHE/ASX:OHE) is a global health technology company that provides solutions which enable healthcare to more than 100 million patients globally. Built on an open platform, Orion Health is a leading provider of interoperability, population health management and precision medicine solutions. The company employs more than 800 people around the world and is committed to continual innovation, investing substantially in research and development to cement its position at the forefront of precision medicine. For more information visit www.orionhealth.com