HMS Holdings Corp. (the “Company” or “HMS”) (NASDAQ:HMSY), a
leading provider of coordination of benefits, payment integrity and
care management solutions for payers, and Eliza Corporation
(“Eliza”), a privately-held health engagement management and member
analytics firm providing comprehensive and personalized
member-centric outreach and engagement solutions to improve quality
of care and clinical outcomes, today announced that they have
entered into a definitive purchase agreement pursuant to which a
wholly-owned subsidiary of HMS will acquire Eliza for a cash
purchase price of $170 million. The transaction is expected to be
accretive to the Company’s 2017 earnings, and is expected to close
by early second quarter of 2017, subject to the satisfaction of
regulatory approvals and other customary closing conditions.
Incorporated in 2000 and owned by Parthenon
Capital Partners, company founders, and certain minority
shareholders, Eliza is the leading healthcare engagement management
solution delivering a truly personalized conversation with the
modern healthcare consumer at an enterprise scale. Eliza reaches
and engages members through a proprietary, scalable technology
solution that leverages a multi-channel communications platform
incorporating consumer and proprietary data sources, analytics, and
behavior-driven program design to help clients achieve desired
outcomes.
Eliza’s solutions are cloud-based and utilize
advanced proprietary predictive analytics, behavioral science, and
data driven design methodologies to personalize outreach. Eliza has
consistently been a market leader and innovator, as evidenced by
more than 50 domestic and international patents and patent
applications which HMS will acquire. Eliza’s health engagement
management and member analytics platform successfully integrates
proprietary data assets, a deep understanding of the healthcare
consumer, and multichannel outreaches and technology to deliver
mission-critical results for customers - primarily health plans,
PBMs, home health and disease management companies. Eliza serves
over 70 customers, boasting a strong presence with the leading US
health plans serving eight of the top 10 health plans in the United
States.
Eliza leverages analytics and behavioral science
to implement real-time solutions, delivering a compelling ROI to
customers and saving healthcare dollars. The Eliza solution suite
assists customers with the identification of gaps in care and
appropriate condition management; quality scores; revenue and cost
management; wellness and preventive care; medication adherence; and
member satisfaction and retention. It includes the following
components:
- Quality of Care - personalized member centric plans to improve
quality, cost and clinical outcomes through coordinated engagement
activities tailored throughout the year to organizational and
member needs
- Consumer Experience - advanced analytics plus a multichannel
engagement platform to streamline core communication activities and
enable achievement of best-in-class member experience
- Revenue Management and Membership Growth - member focused
initiatives to improve sustainability and drive retention - leading
to greater revenue opportunities
“Eliza has perfected both the art and science of
member outreach and engagement, which is a particularly
complementary offering for the EssetteSuite care and population
management technology platform – allowing our customers to take
effective action in closing gaps in care – and a great opportunity
to leverage our ability to identify high utilizers in the HMS
database,” said Bill Lucia, HMS Chairman and CEO. “We were
particularly attracted to the flexible, scalable and cloud-based
infrastructure that Eliza has built and their proprietary and
patented technology. This acquisition will represent an additional
building block in our strategic expansion into the fields of care
and population analytics and risk management, and will present both
potential short and longer term growth avenues for HMS. We will
also be able to utilize certain Eliza operational assets and
analytics to strengthen the delivery of our core products,” added
Lucia.
“Payers are seeking reliable insights and
actionable information to manage risk and improve the quality of
care delivered. The addition of Eliza will position HMS to impact
both revenue and costs for our health plan customers, while
continuing to supply needed tools to more effectively manage the
care of their members across all markets. Our ability going forward
to be a one-stop source for cost containment initiatives –
including coordination of benefits, payment integrity, care
management, member health and risk analytics, and now member
engagement – is unique in the marketplace and will further
strengthen our capacity to help bend the healthcare cost curve,”
concluded Lucia.
“Over the past fifteen years, Eliza has built
best-in-class solutions designed to deliver a consistent consumer
experience, utilizing data-driven design to personalize content,
motivate consumers, drive ideal behaviors and reduce the cost of
care. As a result, eight of the top ten health plans in the U.S.
utilize our unified approach to get their members to take
action,” said John Shagoury, Eliza President and CEO. “As a
stand-alone company, Eliza had a track record of driving measurable
and meaningful engagement results through our health
engagement management platform providing comprehensive, end-to-end
solutions for our customers. The combination with HMS will
substantially enhance the value proposition for existing and
potential buyers of our collective product suite – offering a more
attractive and comprehensive cost containment, care management and
member engagement platform than any other market participant,”
added Shagoury.
The transaction is not subject to a financing
condition. HMS intends to fund the entire purchase price with
available liquidity.
Citi acted as exclusive financial advisor for
HMS, and Stinson Leonard Street LLP acted as legal advisor. William
Blair and FT Partners acted as financial advisors for Eliza, and
Kirkland & Ellis LLP acted as legal advisor.
About HMS
HMS Holdings Corp., through its subsidiaries,
provides coordination of benefits, payment integrity and care
management solutions for payers. HMS serves state Medicaid
programs; commercial health plans, including Medicaid managed care,
Medicare Advantage and group and individual health lines of
business; federal government health agencies, including the Centers
for Medicare & Medicaid Services and the Veterans Health
Administration; government and private employers; child support
agencies; and other healthcare payers and sponsors. As a result of
HMS’s services, customers recover billions of dollars annually and
save billions more through the prevention of improper payments.
About Eliza Corporation Eliza
is a healthcare engagement management solution capable of
delivering a truly personalized conversation with the modern
healthcare consumer at an enterprise scale. It is why eight of the
top ten health plans in the United States are Eliza’s clients—their
unified approach gets members to act, and their Health
Engagement Management solutions deliver effective results. Eliza
integrates a scalable, multi-channel technology platform, along
with proprietary data sources, industry-leading analytics, and
experience-driven program design services to deliver outcomes that
matter. Eliza builds upon each interaction to help clients drive
outcomes such as improved HEDIS and Star ratings, increased
medication adherence, reduced membership 'churn' and greater member
satisfaction. For more information,
visit www.elizacorp.com.
Safe Harbor Statement
This press release contains "forward-looking
statements" within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995. Such statements reflect our current
expectations, projections and assumptions about our financial
results, business, the economy and future events or conditions.
They do not relate strictly to historical or current facts.
Forward‐looking statements can be identified by words such as
“aims,” “anticipates,” “believes,” “estimates,” “expects,”
“forecasts,” “intends,” “likely,” “may,” “plans,” “projects,”
“seeks,” “targets,” “will,” “would,” “could,” “should,” and similar
expressions and references to guidance, although some
forward-looking statements may be expressed differently. In
particular, these include statements relating to future actions,
business plans, objectives and prospects, future operating or
financial performance. Factors or events that could cause actual
results to differ may emerge from time to time and are difficult to
predict. Should known or unknown risks or uncertainties
materialize, or should underlying assumptions prove inaccurate,
actual results may differ materially from past results and those
anticipated, estimated or projected. We caution you not to place
undue reliance upon any of these forward-looking
statements.
Factors that could cause or contribute to such
differences, include, but are not limited to: a delay in or failure
to complete the planned acquisition of Eliza; our ability to
execute our business plans or growth strategy; our failure to
innovate, develop or implement new or enhanced solutions or
services; the nature of investment and acquisition opportunities we
are pursuing, and the successful execution of such investments and
acquisitions; our ability to successfully integrate acquired
businesses and realize synergies; variations in our results of
operations; our failure to accurately forecast the revenue under
our contracts and solutions; our ability to protect our systems
from damage, interruption or breach, and to maintain effective
information and technology systems and networks; our failure to
protect our intellectual property rights, proprietary technology,
information processes, and know-how; significant competition for
our solutions and services; our failure to maintain a high level of
customer retention or the unexpected reduction in scope or
termination of key contracts with major customers; customer
dissatisfaction, our non-compliance with contractual provisions or
regulatory requirements; our failure to meet performance standards
triggering significant costs or liabilities under our contracts;
our inability to manage our relationships with information and data
sources and suppliers; reliance on subcontractors and other third
party providers and parties to perform services; our ability to
continue to secure contracts and favorable contract terms through
the competitive bidding process and to prevail in protests or
challenges to contract awards; pending or threatened litigation;
unfavorable outcomes in legal proceedings; our success in
attracting qualified employees and members of our management team;
our ability to generate sufficient cash to cover our interest and
principal payments under our credit facility or to borrow or use
credit; unexpected changes in our effective tax rates;
unanticipated increases in the number or amount of claims for which
we are self-insured; changes in the U.S. healthcare environment or
healthcare financing system, including regulatory, budgetary or
political actions that affect procurement practices and healthcare
spending; our failure to comply with applicable laws and
regulations governing individual privacy and information security
or to protect such information from theft and misuse; negative
results of government or customer reviews, audits or
investigations; state or federal limitations related to outsourcing
or certain government programs or functions; restrictions on
bidding or performing certain work due to perceived conflicts of
interests; the market price of our common stock and lack of
dividend payments; and anti-takeover provisions in our corporate
governance documents; and other factors, risks and uncertainties
described in our most recent Annual Report on Form 10-K and in our
other filings with the Securities and Exchange Commission. Any
forward-looking statements are made as of the date of this press
release. Except as may be required by law, we disclaim any
obligation to publicly update forward-looking statements, whether
as a result of new information, future events or otherwise.
Investor Contact:
Dennis Oakes
SVP, Investor Relations
dennis.oakes@hms.com
212-857-5786
Media Contact:
Francesca Marraro
VP, Marketing and Communications
fmarraro@hms.com
212-857-5442
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