Inovalon, a leading technology company providing advanced cloud-based analytics and data-driven intervention platforms to the healthcare industry, has entered into a definitive agreement to acquire Avalere Health, Inc., a leading provider of data-driven advisory services and business intelligence solutions to the pharmaceutical and life sciences industry.
The addition of Avalere, with its more than 200 pharma/life sciences clients, is expected to significantly expand Inovalon’s leadership in the broader healthcare marketplace and enables the company to expand its industry leading capabilities into an expansive adjacent market. Avalere, a growing provider of data-driven advisory services that already serves 13 of the top 15 pharma companies, will operate as a subsidiary of Inovalon, enabling Inovalon the ability to offer a powerful combination of business intelligence, cloud-based analytics, and data-driven insights to the pharma/life sciences industry. Avalere’s CEO, Dan Mendelson, will join the executive leadership team of Inovalon where he will continue to lead the day-to-day operations of the core business of Avalere.
Key highlights of the transaction includes: The purchase price is $140 million, which is comprised of $135 million of cash and $5 million of restricted stock; Closing is expected to occur on or about Tuesday September 1, 2015, subject to the satisfaction of customary closing conditions and antitrust clearance; Avalere reported $47.1 million of revenue in the calendar year ended December 31, 2014 and, given the expected timing of closing, the transaction is estimated to be mildly accretive in 2015, adding a penny or less of Non-GAAP diluted net income per share; The acquisition supports Inovalon’s strategic expansion into the pharma/life sciences market which, according to a 2013 International Data Corporation (IDC) report, represents a large and materially untapped total addressable market (TAM) of $30B+; The addition of Avalere’s 200+ analysts and highly experienced specific subject matter experts are seen as a strong expander of Inovalon’s scale; In addition to serving Fortune 500 pharma / life sciences companies and contract research organizations, Avalere serves managed care companies, provider organizations, and other healthcare-related organizations; The Avalere team will retain its globally recognized brand.
“Data is transforming healthcare, and life sciences companies in particular need better information and analytics to drive commercial and strategic decisions,” said Dan Mendelson, CEO of Avalere. “Our combination with Inovalon will enable us to bring unique data-based solutions to the market while expanding on our outstanding core products and services. This is an exciting time within the healthcare industry, our clients, and our companies.”
“The sea change taking place in our healthcare system from a volume-based and consumption-based healthcare model is impacting payors, providers, and the pharma/life sciences landscape alike,” said Keith Dunleavy, M.D., chief executive officer and chairman of the board of Inovalon. “Avalere’s deep industry experience, expertise, and relationships further strengthens and expands our capacity to drive meaningful and measurable impact through data-driven insights for not only several core areas of our existing client base, but rather excitingly, the very large pharma/life sciences industry.”
Avalere is a vibrant community of innovative thinkers dedicated to solving the challenges of the healthcare system. Working as a trusted thought-leader and partner to the senior leadership of more than 200 pharma/life sciences clients, as well as an extensive array of payor, provider, and research institutions.