TriZetto Gets Apax Private Equity Buyout (TZIX)

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TriZetto Group Inc. (NASDAQ: TZIX) is being acquired. Private equity firm Apax Partners will acquire health-care software company for $1.4 billion, or $22.00 per share.  This represents a 25% premium to Thursday’s closing price, and is slightly more than a 5% premium to the 52-week high of $20.85.

Apax has made deals in the hospital and drug sectors, so this isn’t its first prom dance.  It also has some $35 Billion in "funds under its advice." It appears that private equity money is still willing to look at deals in medical technology and information management that helps hospitals and medical companies.

What is interesting is that BlueCross BlueShield of Tennessee and The Regence Group, both of which are customers of TriZetto, are providing "an undisclosed portion" of the funding for this transaction and they will be equity investors in the newly private company.  Regence is a combination of several BlueCross BlueShield operations in the U.S.

TriZetto shares used to trade significantly higher, but that was back in 2000 when we were in the bubble days.  While this may take six months to close the merger, it doesn’t look like there are too many holders that will pan this deal.  Of the analysts that cover the stock, the average price is just north of $24.00.

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Jon C. Ogg
April 11, 2008

Jon Ogg produces the Special Situation Investing Newsletter.  He can be reached at jonogg@247wallst.com and he does not own securities in the companies he covers.