R1 RCM Inc. (NASDAQ: RCM) received an offer from New Mountain Capital to buy out the company's other investors for $13.75 a share in cash. With approximately 420 million shares outstanding and net debt of ~$1.46 billion, the deal implies an enterprise value of approximately $7.24 billion for the revenue cycle management company. The company has traditionally provided end-to-end outsourced billing and revenue cycle services to large health systems, and expanded into providing software and services on a modular basis with the 2022 acquisition of Cloudmed for $4.1 billion.
Revenue Cycle EBITDA Multiples
According to R1's 4Q 2023 earnings release, full-year 2023 revenue was $2.254b and adjusted EBITDA was $614.3m, implying a trailing multiple of 11.8x EBITDA, which is well below the implied multiples from R1's recent acquisitions of Acclara and Cloudmed. Forward guidance is for 2024 adjusted EBITDA within the range of $650m to $670m, implying a forward multiple of 11x.
Other RCM / Billing Deals
Read Scope Research's take on other revenue cycle and billing M&A transactions:
About Scope Research
The Scope Research Healthcare M&A Valuation Database currently has financial details for 51 revenue cycle management (RCM) and healthcare billing deals going back to 2010, 38 of which include reported EBITDA multiples. The revenue cycle data can be purchased individually, while our affordable annual subscriptions provide access to all of our healthcare M&A databases and segments, updated continuously.
Don't hesitate to reach out to Will Hamilton at will@scoperesearch.co with questions about your specific situation.