R1 RCM (RCM) - Get Report shares were higher after the health information services company said it would acquire Cerner's (CERN) - Get Report RevWorks services business and commercial, non-federal client relationships.
Terms weren't disclosed. The deal is expected to close in the third quarter.
R1 RCM shares at last check were up 9.5% to $11.70, while Cerner was little changed at $73.12.
As part of the transaction, Cerner, the North Kansas City, Mo., electronic-health- record company, will extend R1’s revenue cycle capabilities and expertise to Cerner clients and new prospects.
Cerner RevWorks offers revenue cycle management outsourcing services to hospitals. RevWorks associates will be offered positions with R1.
“We look forward to working collaboratively with Cerner to deliver superior results for healthcare providers and the communities they serve,” Gary Long, R1's executive vice president and chief commercial officer of R1, said in a statement.
“With our interoperable technology and end-to-end platform, we are well-positioned to serve Cerner’s customers, as well as other healthcare organizations across the country."
Brenna Quinn, senior vice president of revenue cycle management at Cerner, said “we’re focused on having the right strategies, powerful and proven platforms, world-class talent, and partners like R1 to meet these goals.”
Centerview Partners was financial adviser and Kirkland & Ellis was legal adviser to R1, Chicago. Greenhill & Co. advised Cerner.
Last month, R1 RCM reported first-quarter revenue of $320.5 million, up 16% from a year earlier. Net income totaled $18.2 million, compared with $200,000 a year earlier..
Due to uncertainty caused by the coronavirus pandemic, R1 RCM suspended financial guidance it had provided on Feb. 20.