Cognizant Buys TriZetto To Bolster Healthcare

IT outsourcing specialist Cognizant Technology Solutions Corp is to buy TriZetto Corp from its venture capitalist owners.

The all cash deal will see Cognizant hand over $2.7bn (£1.6bn) to Apax Partners. The deal is being touted as a way for Cognizant to expand its healthcare software business.

Growth Opportunity?

New Jersey-based Cognizant is one of the largest providers of outsourcing services, but the deal will see it add TriZetto’s 3,700 employees to Cognizant’s existing healthcare business. That healthcare business has more than more than 200 clients, and includes 16 of the top 20 US health plans.

“Healthcare is undergoing structural shifts due to reform, cost pressure and shifting responsibilities between payers and providers. This creates a significant growth opportunity, which TriZetto will help us capture,” said Francisco D’Souza, CEO of Cognizant.

“We are excited that the integrated portfolio of capabilities across technology and operations will uniquely position us to help clients drive higher levels of operational efficiency, while re-imagining care for the future.”

Englewood, Colorado-based TriZetto has been owned by London-based private-equity firm Apax since 2008, when Apax acquired it for $1.19 billion (£729m). TriZetto serves about 350 healthcare plans and supplies software to almost 245,000 doctors and other care providers.

“Cognizant and TriZetto have had a long-term relationship, having jointly served a number of healthcare clients to date,” said Gordon Coburn, President of Cognizant. “This acquisition is a natural fit for us. It represents a great opportunity to integrate services across our three horizons – traditional IT services; high-growth businesses such as management consulting, business process services and IT infrastructure services; and emerging delivery models – and provide even greater value to our clients.”

IT & Healthcare

Although Cognizant is perhaps better known for its IT expertise, it is worth noting that healthcare currently represents approximately 26 percent of Cognizant’s revenue. Other tech-oriented companies also have their own healthcare operations, as tech usage within the healthcare arena continues to grow.

On this side of the Atlantic there have been a number of IT projects within the NHS. The most infamous has to be the failed National Programme for IT (NPfIT) project.

NPfIT was devised in 2002, but costs sky rocketed and it was eventually dismantled, although some implemented parts of NPfIT remain in operation today.

Yet there has been success stories as well. The NHS Health and Social Care Information Centre (HSCIC) began collecting patient information from GPs in England for the very first time in March this year. It is hoped that the ‘Care.Data’ scheme will enable healthcare professionals to monitor the spread of diseases and the effectiveness of treatments, help cut costs and advance scientific research.

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