Accretive Health, the beleaguered revenue-cycle management firm, is evaluating its next move after turning down a takeover offer from Ascension Health.
The Chicago-based company is working with law firm Kirkland & Ellis as it undergoes a strategic review.
In a news release, Accretive said that Ascension sent the company a letter stating that it would be interested in buying Accretive either on its own or with co-investment partners. Publicly traded Accretive would be taken private and operated as a stand-alone, for-profit division of Ascension.
However, Accretive turned down the offer, deeming it too low. The midpoint of Ascension's preliminary evaluation, on a per-share basis, represented only about 50% of Accretive's market value Thursday, the company said in the release.
Accretive's shares closed Thursday at $5.42, for a market capitalization of $527.9 million.
Ascension also said it does not intend to renew its professional service agreement with Accretive when it expires Aug. 6, 2017. Ascension's hospitals represented about half of Accretive's gross revenue from contracting activities last year.
The health system could not immediately be reached for comment.
Accretive's woes began in 2011, when it entered into a settlement with the Minnesota attorney general for alleged patient privacy violations and overly aggressive bill collection tactics. It paid a fine and agreed to temporarily stop doing business in the state.
Two years later, its troubles escalated when the company said it needed to restate financial results dating back as far as 2011. Delays during that process ultimately led to it getting delisted from the New York Stock Exchange.
During that time, it has undergone a corporate restructuring and management shake-up.
In a financial filing last month, the company reported a 2014 net loss of nearly $80 million compared with net income of $130 million the previous year.
Ascension isn't the only health system interested in owning a revenue-cycle management firm, a strategy which has benefited for-profit hospital chains in recent years. Catholic Health Initiatives recently raised its stake in Conifer Health Solutions, a revenue-cycle management firm majority owned by Tenet Healthcare Corp., to 23.8% from 2%.