Software firm Ability Network sells to Inovalon for $1.2 billion

Neal St. Anthony, Star Tribune (Minneapolis) on

Published in Business News

MINNEAPOLIS -- Fast-growing Ability Network of Minneapolis will be acquired in a $1.2 billion transaction by the data analytics firm Inovalon Holdings of suburban Washington, D.C.

Analysts said Inovalon will get scale and lessen its reliance on insurance companies through access to the 44,000 health care facilities in which Ability's cloud-based software platform provides management and other administrative services and helps link payers and providers.

Bowie, Md.-based Inovalon's technology analyzes data about medical incidents and uses predictive algorithms to suggest health conditions.

Ability Network and Inovalon said they will create "a vertically integrated cloud-based platform empowering the achievement of real-time, value-based care from payers, manufacturers and diagnostics all the way to the patient's point of care."

Inovalon CEO Keith Dunleavy said, "The addition of Ability's platform-based applications, extensive provider client base and connectivity, and efficient, high-volume distribution channel will enable Inovalon to deliver increasingly differentiated value to both Ability's provider customers and Inovalon's established client base, as well as drive significant growth and accretive financial performance for our shareholders in 2018 and going forward."

The transaction consists of $1.1 billion cash and $100 million in restricted Inovalon stock.

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Inovalon's stock closed up 2.4 percent to $12.70 per share Wednesday. The company is valued at $1.83 billion.

Ability CEO Mark Pulido is a veteran pharma executive who took over Ability in 2015 with an eye to grow and peddle it for its institutional owner.

The Minneapolis-based software firm, which employs about 550 people, had no comment on layoffs or other implications of the deal.

Ability was acquired in 2014 for $550 million by Boston private-equity firm Summit Partners.


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