IT Software Provider Sold For $2.7 Billion

By Christine Kern, contributing writer

Cognizant plans to move into the healthcare market with its purchase of TriZetto.

Outsourcing firm Cognizant has announced it has entered into a definitive agreement to acquire TriZetto Corporation for $2.7 billion in cash, subject to customary adjustments. Based in Englewood, CO, privately-held TriZetto is a leading provider of healthcare IT software and solutions.

"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.

The acquisition is expected to accelerate Cognizant’s market position and strategy of delivering software and solutions to a wide range of healthcare clients. TriZetto brings to Cognizant new market opportunities and intellectual property, including:

• Multiple industry-leading software platforms used by payers and providers.
• Enhanced competitiveness in integrated engagement opportunities.
• Approximately $1.5 billion of potential revenue synergies cumulatively over the next five years.
• Attractive, non-linear software revenue.

The agreement brings TriZetto and its 3,700 employees into Cognizant's existing healthcare business, which currently serves more than 200 clients, including 16 of the top 20 U.S. health plans and four of the top five pharmacy benefit management companies. Healthcare currently represents approximately 26 percent of Cognizant's revenue.

"TriZetto solutions enable the healthcare interactions of millions of people in the U.S. every day," said Jude Dieterman, President and COO of TriZetto. "Our agreement with Cognizant advances our vision of simplifying healthcare for everyone."

"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.