Datavant, a company assisting healthcare organizations securely connect their data, and Ciox Health, provider of clinical data exchange, have signed a definitive agreement to merge the two companies in a transaction valued at $7.0 billion. The combined entity, to be named Datavant, will seek to enable patients, providers, payers, health data analytics companies, patient-facing applications, government agencies, and life science companies to securely exchange their patient-level data.
The combined company is focused on improving patient outcomes and reducing costs by removing impediments to the secure exchange of health data. Datavant will offer the ability to access, exchange, and connect data among the thousands of organizations in its ecosystem for use cases ranging from better clinical care and value-based payments, to health analytics and medical research.
Upon closing, the new company will be led by current Ciox chief executive officer Pete McCabe as CEO, and current Datavant CEO Travis May will assume the role of president and join the Board of Directors.
“The fragmentation of health data is one of the single greatest challenges facing the healthcare system today,” said 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. 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 May. “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 merger of Ciox Health and Datavant creates a privacy-centric, neutral network facilitating the trusted and compliant exchange of patients’ health data across all stakeholders, unlocking exceptional growth opportunities and the capability to enable thousands of use cases across the entire health ecosystem,” said Matt Holt, managing director and president of private equity at New Mountain. “This transaction significantly accelerates the shared vision of both companies. We look forward to working with Travis, the full team at Datavant as well as the existing and new investors.”
“Datavant’s groundbreaking tokenization technology and the strength of Ciox’s expanded network across providers, payers, health application developers, and life sciences markets makes this combination compelling,” said R. Martin Chavez, vice chairman and partner at Sixth Street. “We are believers in healthcare technology investment that drives improvement in patient outcomes and attempts to solve our most pressing healthcare challenges. This combination has the potential to enable the US healthcare system to become more patient-centric and data-driven through its breakthrough capability for secure collaboration across all industry stakeholders.”
“Roivant created Datavant with Travis because we needed this data ecosystem to exist to fulfill our own mission of accelerating the development of novel medicines for patients,” said Matthew Gline, CEO of Roivant Sciences. “The combination of Datavant and Ciox Health massively expands the reach of that ecosystem and will unlock significant value for us, patients, and for the entire pharmaceutical industry. We look forward to developing additional differentiated technologies at Roivant going forward.”
“The combined Ciox Health and Datavant platform will represent a powerful force in enabling connectivity of critical clinical data across the healthcare ecosystem,” said Jo Natauri, managing director and global head of private healthcare investing for Goldman Sachs Asset Management. “We are thrilled to participate in this transaction and continue our partnerships with New Mountain Capital, Sixth Street and all the world-class institutions involved in bringing this combination together.”
The transaction is 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 at the completion of the transaction.
Deutsche Bank, Goldman Sachs and Triple Tree served as the financial advisors to New Mountain and Ciox. Ropes & Gray LLP served as legal advisor to New Mountain and Ciox; Goodwin Procter LLP served as legal advisor to Datavant. Sidley Austin LLP served as legal advisor to Sixth Street and Goldman Sachs.