Boston, MA 09/16/2014 (wallstreetpr) – According to reports, Cognizant Technology Solutions Corp (NASDAQ:CTSH) has decided to acquire TriZetto in order to take its healthcare business on newer heights. The deal would cost CTST around $2.7 billion. The announcement came on Monday from the management of CTSH. TriZetto is a leading healthcare and IT company and can boost healthcare segment of CTSH, which has not been able to perform up to its standards for last some time.
Impact of this deal on CTSH:
As soon as it announced the acquisition of Trizetto, the shares of Cognizant Technology Solutions Corp (NASDAQ:CTSH) surged nearly 3% in pre-market trading. Healthcare business of CTSH has been the largest revenue generating segment for the company over the past few years. Last year, it generated around 27% of total revenues that CTSH made. Healthcare segment of CTSH couldn’t generate ample revenues over the last three-quarters. It has been set-up under President Barack Obama’s Affordable Care Act and offer services such as billing and call center operations to insurers, claims processing, state-run healthcare exchanges and hospitals running.
TriZetto is owned by private equity firm Apax Partners LLP. It provides IT relates services, the administration of benefits and care management. As per the information provided by Cognizant Technology Solutions Corp (NASDAQ:CTSH), it has a network of more than 245,000 healthcare providers across the country which represent little more than 50% of total insured population of U.S.
TriZetto is an Englewood, Colorado-based company that is expected to cut down the cost that CTSH incur on various healthcare operations. CTSH is expecting that this acquisition will enhance its healthcare segment revenues in the future. The current state of healthcare business in U.S is not that good. It’s going through several structural shifts due to reforms, shifting responsibilities between providers and payers and cost pressure. The management of Cognizant Technology Solutions Corp (NASDAQ:CTSH) thinks that TriZetto acquisition has created a good opportunity to enhance revenues and growth prospects.
