HMS Holdings to acquire Eliza Corporation

Eliza Health

HMS Holdings — which provides software and services for coordination of benefits, payment integrity and care management solutions for payers — is acquiring Eliza Corporation, a privately-held health engagement management and member analytics firm.

Under the definitive purchase agreement, 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.

Founded in 2000 and owned by Parthenon Capital Partners, company founders, and certain minority shareholder — Eliza delivers a truly personalized conversation with the modern healthcare consumer at an enterprise scale. The company 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 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, as well. It serves over 70 customers, including eight of the top 10 health plans in the United States.

“We were particularly attracted to the flexible, scalable and cloud-based infrastructure that Eliza has built and their proprietary and patented technology,” Bill Lucia, HMS Chairman and CEO, said in a statement. “This acquisition will represent an additional building block in our strategic expansion into the fields of care and fulation 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.”

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.