Inovalon, a publicly traded healthcare analytics company, has entered into a definitive agreement to acquire healthcare consulting firm Avalere Health.
The purchase price is $140 million, which is composed of $135 million of cash and $5 million of restricted stock. Inovalon said the deal would significantly expand its footprint in the pharma/life sciences market, which it estimates could be worth $30 billion or more.
“The sea change taking place in our healthcare system from a volume-based and consumption-based healthcare model is impacting payers, providers, and the pharma/life sciences landscape alike," Dr. Keith Dunleavy, CEO and board chairman of Inovalon, said in a news release.
The transaction is expected to close on or about Sept. 1, subject to the satisfaction of customary closing conditions and antitrust clearance. Avalere, which is based in Washington, will operate as a subsidiary of Inovalon. The firm serves 13 of the top 15 pharma companies and also has clients in the managed care and provider sectors.
"This new partnership accelerates our ability to help you with data, by locking in unique and proprietary commercial data and proven business improvement methods," Avalere said in a post on its website.
Avalere CEO Dan Mendelson will continue to lead Avalere's day-to-day operations.
Avalere reported $47.1 million in revenue in the calendar year ended Dec. 31, 2014.
In February, Inovalon, a Bowie, Md.,-based data analytics company, raised nearly $640 million in an initial public stock offering. The company reported net income of $110.1 million on $361.5 million in revenue in 2014.
Inovalon's analytics services leverage its own database of 9.2 billion medical events on 120 million longitudinally matched patients from more than 750,000 physicians and nearly 250,00 clinical facilities to provide clients clinical care and outcomes insight across a wide range of diseases and therapies, according to the company's filings with the Securities and Exchange Commission.