BY Richard Summerfield
Health data companies Datavant and Ciox Health have agreed to merge in a deal valued at $7bn.
The deal is expected to close in the third quarter of 2021, subject to regulatory approval and customary closing conditions. The newly merged company will be known as Datavant and will be led by Pete McCabe, chief executive of Ciox, the companies said in a statement.
The new company will be the largest health data ecosystem in the US, enabling patients, providers, payers, health data analytics companies, patient-facing applications, government agencies and life science companies to securely exchange their patient-level data. The company will have a network of more than 2000 US hospitals and 15,000 clinics as well as data analytics companies and government agencies.
“The fragmentation of health data is one of the single greatest challenges facing the healthcare system today,” said Mr McCabe. “Each of us has many dozens of interactions with the healthcare system over the course of our lives, and that information is retained in siloed databases across disparate institutions. Every informed patient decision and every major analytical question in healthcare requires the ability to pull that information from across the health data ecosystem while protecting patient privacy.”
He continued: “We are thrilled to join forces with the Datavant team to connect health data to improve patient outcomes. Together we are well positioned to navigate the technical, operational, legal, and regulatory challenges to doing so, and are committed to acting as a neutral connectivity solution for our many customers and partners.”
“Every decision made in healthcare should be informed by data,” said Travis May, chief executive of Datavant. “Our goal is to create a ubiquitous, trusted, and neutral data ecosystem where parties across the healthcare system can seamlessly and securely exchange data – unlocking better outcomes, faster research, and healthcare at a lower cost. The combined company is positioned to transform America’s health infrastructure and power the health data economy.”
The transaction is being supported by an existing investor group of private equity, venture capital and strategic investors led by New Mountain Capital, Roivant Sciences, Transformation Capital, Merck Global Health Innovation Fund, Labcorp, Cigna Ventures, Johnson & Johnson Innovation – JJDC, Inc., and Flex Capital. It also includes a significant new investment by Sixth Street with participation from Goldman Sachs Asset Management’s West Street Strategic Solutions fund. Sixth Street will join the new company’s board of directors on completion of the transaction.