Waystar, a top provider of healthcare payment software, today announced a definitive agreement to acquire Iodine Software, a pioneer in AI-powered clinical intelligence, for a total enterprise value of $1.25 billion. This landmark acquisition, funded through an equal mix of cash and stock, is set to significantly accelerate the AI-driven transformation of healthcare payments, aiming to drastically reduce administrative burdens and enhance financial performance for providers nationwide.
The merger brings together Waystar’s expansive cloud-based payment platform with Iodine’s advanced AI capabilities in clinical documentation integrity (CDI) and utilization management. Iodine’s CognitiveML™ engine, trained on a vast dataset representing over a third of U.S. inpatient discharges, is expected to seamlessly integrate with Waystar’s AltitudeAI™ platform. This strategic synergy aims to create an end-to-end solution for healthcare organizations, tackling the estimated $440 billion in annual administrative costs that currently burden providers.
“Our mission is to simplify healthcare payments by eradicating unnecessary denied claims, automating manual work, and increasing transparency for providers and patients,” said Matt Hawkins, CEO of Waystar. “Welcoming Iodine’s talented team and clinical intelligence platform to Waystar is a terrific next step in achieving our mission and transforming healthcare through AI.”
The combined entity will serve a formidable client base, including 17 of the 20 U.S. News Best Hospitals, empowering over one million providers with advanced AI to prevent denials, reduce manual effort, and improve revenue cycles. Waystar anticipates the acquisition to be immediately accretive to gross margin and adjusted EBITDA margin, with positive impacts on revenue growth and non-GAAP net income per diluted share beginning in 2027. Furthermore, the companies have identified over $15 million in run-rate cost synergies to be realized within 18-24 months post-closing.
The transaction, which has received unanimous approval from the boards of both companies, is expected to close by year-end 2025, subject to customary closing conditions and regulatory approvals. This acquisition marks Waystar’s first since going public and underscores its commitment to leveraging advanced AI, including generative AI, to revolutionize the healthcare payment landscape.
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