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Scoop: KKR paying $10.5B for Cotiviti stake

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Feb 14, 2024
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KKR will pay $10.5 billion to acquire a stake in Cotiviti from Veritas Capital, Axios has learned.

Why it matters: The deal includes $5 billion in syndicated debt that JPMorgan will manage — a notable win for traditional banks on a major health care deal.

Zoom in: Announced today and expected to close in the second quarter, the deal will leave KKR and Veritas with equal ownership stakes.

  • The $5 billion leveraged loan sale launched today breaks down into a $4.4 billion floating rate term loan led by JPM, with a $600 million fixed rate term loan led by Goldman Sachs, Bloomberg reported.
  • KKR and Veritas worked to syndicate a good deal of that debt before the deal launched and the $5 billion was oversubscribed by that point, as reported by Bloomberg and confirmed by Axios.

The big picture: The larger equity slug continues an ongoing trend in private equity deals seeing firms commit more cash than debt.

  • Wall Street lenders are coming back into private equity deals after a long hiatus.

How it works: South Jordan, Utah-based Cotiviti offers payment accuracy and financial analytics for health care providers and insurers.

  • KKR has a solid foothold in health data analytics, with portfolio companies like Clarify Health Solutions, Headlands Research and Resolian Bioanalytics.

By the numbers: Veritas took Cotiviti private in 2018 for about $4.9 billion, and has made at least two previous efforts to exit.

  • Carlyle was looking to acquire the business for $15 billion back in February of last year.
  • That hinged on Carlyle's ability to secure a $5.5 billion private loan.
  • In 2021, Bloomberg reported the firm had Cotiviti on a dual track process.

KKR declined to comment. Veritas and JPMorgan did not respond to an immediate request for comment.

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