Ascension’s investment in R1 RCM pays off with $1.1 billion valuation

R1 RCM signed a definitive agreement to be acquired in full by funds affiliated with investment firms TowerBrook Capital Partners — currently a partial owner — and Clayton, Dubilier & Rice for $8.9 billion including about $3 billion in debt.

The deal values the revenue cycle management company at $14.30 per share, which would attach a value of $1.1 billion to shares effectively owned by St. Louis-based Ascension health system, according to a reading of Securities and Exchange Commission filings. A spokesman for R1 declined to discuss anything beyond a news release and a spokesperson for Ascension could not be reached.

Ascension had acquired the shares back in 2015 as an investor in a fund managed by TowerBrook through convertible stock that valued shares at $2.50 each. The future of the company, then known as Accretive Health, was in question after accounting irregularities and accusations of overly aggressive collection practices were uncovered in Minnesota.

The deal price of $14.30 per share represents a premium of approximately 29% to R1 RCM shares the last full trading day in February before another investment firm, New Mountain Capital, publicly disclosed it wanted to acquire the company, and is not among the purchasing organizations but is receiving a strong return on its investment.