Cognizant to buy IT firm TriZetto Corp. for $2.7 billion

Cognizant on Monday announced that it is acquiring TriZetto Corporation for $2.7 billion in cash. The privately held TriZetto, based in Englewood, is a leading provider of healthcare IT software and solutions.

In a statement, Cognizant said: “It has entered into a definitive agreement to acquire TriZetto Corporation for $2.7 billion in cash, subject to customary adjustments.”

Cognizant provides services such as claims processing, billing and call center operations to insurers, hospitals and some state-run health care exchanges set up under President Barack Obama's Affordable Care Act, also known as Obamacare.

TriZetto provides information technology services, including care management and the administration of benefits. The company said it reaches 245,000 healthcare providers, representing more than half of the insured population in the United States.

President of Cognizant Company, Gordon Coburn said, “It (acquisition) represents a great opportunity to integrate services across our three horizons—traditional IT services, high—growth businesses like management consulting, business process services and IT infrastructure services and emerging delivery models.”

Cognizant CEO Francisco D’Souza said 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,” he added.

The transaction is expected to be immediately accretive to Cognizant’s non-GAAP EPS, excluding one-time transaction costs and adjustments, Cognizant CFO Karen McLoughlin said.

“That earnings benefit is expected to increase over time as we realise significant revenue synergy potential from the combination of these businesses,” she added.