R1 RCM’s $4.1 Billion Acquisition of Cloudmed

Kirkland & Ellis advised R1 RCM, Wachtell, Lipton, Rosen & Katz advised TowerBrook Capital Partners L.P., R1’s largest shareholder. Ropes & Gray acted as legal counsel to Cloudmed on the deal.

R1 RCM Inc. (NASDAQ: RCM), a leading provider of technology-driven solutions that transform the patient experience and financial performance of healthcare providers, has entered into a definitive agreement to acquire Cloudmed, a leader in Revenue Intelligence™ solutions for healthcare providers, in an all-stock transaction. The transaction values Cloudmed at approximately $4.1 billion, including $857 million of net debt, based on R1’s closing stock price on January 7, 2022. The transaction, which has been unanimously approved by the boards of directors of both companies, is expected to close in the second quarter of 2022, subject to approvals and closing conditions. 

R1 is a leading provider of technology-driven solutions that transform the patient experience and financial performance of hospitals, health systems, and medical groups.

Cloudmed partners with over 3,100 healthcare providers in the United States and recovers over $1.5 billion of underpaid or unidentified revenue for its clients annually. 

Centerview Partners LLC acted as lead financial advisor to R1. J.P. Morgan Securities LLC also acted as a financial advisor to R1. Barclays acted as financial advisor to Cloudmed.

The Kirkland team was led by corporate partners Bradley Reed (Picture) and Richard Porter with corporate associates Will Lawley, Jonathan Slack and Ian Hesterly, capital markets partners Robert Hayward and Alexander Schwartz and associates Ben Richards and Nick Pappas, and debt finance partners Louis Hernandez and John Kefer.

The Wachtell Lipton’s team was led by partners Steven A. Cohen and Elina Tetelbaum included George N. Tepe, Associate (Corporate), Ilene Knable Gotts, Partner, Lori S. Sherman, Associate (Antitrust), and Jodi J. Schwartz, Partner (Tax).

The Ropes & Gray team that advised New Mountain Capital and Cloudmed was led by private equity partners John Sorkin (New York) and Andrew Silver (both of New York), and included private equity partner Garrett Charon (New York), tax partners Alyssa Kollmeyer (Boston) and  Adam Greenwood (New York), benefits partner Danna Kivell (New York), leveraged finance partner Stefanie Birkmann (New York), health care partner Jennifer Romig (Chicago), labor & employment partner Megan Bisk (Boston), capital markets partner Rachel Phillips (New York), litigation & enforcement counsel Christian Reigstad (New York), mergers & acquisitions partner Sarah Young (New York), litigation & enforcement partners Jonathan Klarfeld, Samer Musallam (both of Washington, D.C.) and Ruchit Patel (London), IP transactions partner Megan Baca (Silicon Valley), commercial & securities litigation partner David Hennes, capital markets counsel Marc Rotter and private equity counsel Andrea Bidegaray Stephen (all of New York).

Involved fees earner: Robert Hayward – Kirkland & Ellis; Louis Hernandez III – Kirkland & Ellis; Ian Hesterly – Kirkland & Ellis; John Kefer – Kirkland & Ellis; Will Lawley – Kirkland & Ellis; Nick Pappas – Kirkland & Ellis; Richard Porter – Kirkland & Ellis; Bradley Reed – Kirkland & Ellis; Ben Richards – Kirkland & Ellis; Alexander Schwartz – Kirkland & Ellis; Jonathan Slack – Kirkland & Ellis; Megan Baca – Ropes & Gray; Andrea Bidegaray Stephen – Ropes & Gray; Stefanie Birkmann – Ropes & Gray; Megan Bisk – Ropes & Gray; Garrett Charon – Ropes & Gray; Adam Greenwood – Ropes & Gray; David Hennes – Ropes & Gray; Danna Kivell – Ropes & Gray; Jonathan Klarfeld – Ropes & Gray; Alyssa Kollmeyer – Ropes & Gray; Samer Musallam – Ropes & Gray; Ruchit Patel – Ropes & Gray; Rachel Phillips – Ropes & Gray; Christian Reigstad – Ropes & Gray; Jennifer Romig – Ropes & Gray; Marc Rotter – Ropes & Gray; Andrew Silver – Ropes & Gray; John Sorkin – Ropes & Gray; Sarah Young – Ropes & Gray; Steven Cohen – Wachtell, Lipton, Rosen & Katz; Ilene Knable Gotts – Wachtell, Lipton, Rosen & Katz; Jodi Schwartz – Wachtell, Lipton, Rosen & Katz; Lori Sherman – Wachtell, Lipton, Rosen & Katz; George Tepe – Wachtell, Lipton, Rosen & Katz; Elina Tetelbaum – Wachtell, Lipton, Rosen & Katz;

Law Firms: Kirkland & Ellis; Ropes & Gray; Wachtell, Lipton, Rosen & Katz;

Clients: New Mountain Capital; R1 RCM; TowerBrook Capital Partners L.P.;