R1 RCM is considering an offer valued at $5.8 billion from its largest shareholder, private equity firm New Mountain Capital, to acquire the remainder of the revenue cycle management company and take it private.
New Mountain Capital would pay $13.75 per share to acquire R1’s outstanding shares, according to a Monday regulatory filing. It already owns more than 32% of R1’s 419 million shares.
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R1, which handles providers’ billing and claims management services, is reviewing the proposal, CEO Lee Rivas said during an earnings call Tuesday. The company is confident in the demand for its services, especially as some providers continue to struggle with “financial pressure, high labor [costs], inconsistent adoption of technology and payer pressure,” he said on the call.
In a statement, a spokesperson for R1 said the company is “committed to doing what is best for [its] shareholders, customers and associates.”
At the request of R1, New Mountain Capital said in the filing that it is discussing the proposal with TCP-ASC, an investment vehicle jointly owned by TowerBrook Capital Partners and Ascension. TCP-ASC owns 30% of R1.
St. Louis-based Ascension did not immediately respond to a request for comment.
R1 reported net income of $3.3 million on revenue of $2.25 billion in 2023, compared with a net loss of $63.3 million on revenue of $1.81 billion in 2022. R1 shares were trading near $14.50 per share Tuesday morning, up 30% from Friday's close.
