Waystar to Purchase Iodine Software program for $1.25B

What You Ought to Know: 

– Waystar, a supplier of healthcare fee software program introduced a definitive settlement to amass 100% of Iodine Software (“Iodine”) for $1.25B. 

– The proposed acquisition is predicted to considerably speed up Waystar’s capacity to rework healthcare funds by means of its main cloud-based software program platform, empowering a couple of million suppliers with superior AI capabilities to forestall denials, cut back handbook 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 web earnings per diluted share in 2027.

Addressing Billions in Misplaced Income

Iodine Software program is trusted by most of the nation’s premier Health methods 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 every year attributable to administrative errors between care supply and submission, costing suppliers billions in misplaced income. This highlights the important position 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 handbook work, and rising transparency for suppliers and sufferers,” mentioned Matt Hawkins, CEO of Waystar. “We’re dedicated to remodeling healthcare by means of harnessing the facility of AI to sort out essentially the most important challenges in healthcare funds. Welcoming Iodine’s gifted staff and medical intelligence platform to Waystar is a terrific subsequent step in attaining our mission.”

Strategic and Monetary Advantages of the Acquisition

The acquisition affords 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 information property with Waystar’s expansive information community is predicted to reinforce the influence 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, constantly trains on thousands and thousands of affected person encounters and billions of medical information factors to ship related insights.
• Deepens Relationships with Premier Health Techniques: Iodine brings sturdy adoption and credibility amongst main hospitals and Health methods, increasing Waystar’s scale and deepening relationships with premier suppliers. The mixed firm is predicted 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 important cross-sell potential. Waystar has recognized greater than $15 million in run-rate value synergies, to be realized throughout 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 totally diluted, professional forma foundation, whereas Iodine fairness holders will personal roughly 8%. Creation, Iodine’s largest shareholder, is predicted to solely obtain Waystar shares and can comply with be locked up for 18 months after closing.

Waystar expects to keep up a robust steadiness sheet with an estimated adjusted web leverage ratio at transaction shut of roughly 3.5x. The transaction is anticipated to shut by year-end 2025, topic to customary closing situations and relevant regulatory approvals.

Waystar additionally supplied preliminary second quarter 2025 outcomes, anticipating income to be roughly $271M, representing roughly 15% year-over-year progress. Waystar will share extra Information on its Q2 2025 outcomes on July 30, 2025.