Waystar to acquire Iodine Software for $1.25 billion

LEHI, Utah/LOUISVILLE, Ky./AUSTIN, Texas - Waystar (NASDAQ:WAY), a healthcare payment software provider with a market capitalization of $6.37 billion and an impressive gross margin of 67%, announced today it has reached a definitive agreement to acquire Iodine Software for $1.25 billion in a cash and stock transaction. According to InvestingPro analysis, Waystar maintains a "GREAT" financial health score, supported by strong liquidity metrics and consistent profitability.

The acquisition will be funded through a 50/50 mix of cash and stock, with Iodine’s current shareholders set to own approximately 8% of the combined company upon completion. Advent International, Iodine’s largest shareholder, will receive only Waystar shares and has agreed to an 18-month lock-up period. With a robust current ratio of 3.12, Waystar’s liquid assets well exceed its short-term obligations, positioning the company strongly for this strategic acquisition.

Iodine Software provides AI-powered clinical intelligence software that helps healthcare providers address revenue leakage and administrative errors in clinical documentation and coding. According to the companies, up to 60 million claims are denied annually due to administrative errors between care delivery and submission.

"Our mission is to simplify healthcare payments by eradicating unnecessary denied claims, automating manual work, and increasing transparency for providers and patients," said Matt Hawkins, Chief Executive Officer of Waystar, in a statement based on the press release.

The transaction is expected to expand Waystar’s total addressable market by more than 15% and strengthen its AI capabilities in clinical documentation, utilization management, and revenue leakage identification. Waystar has identified more than $15 million in run-rate cost synergies to be realized within 18-24 months after closing.

Waystar expects the acquisition to be immediately accretive to gross margin and adjusted EBITDA margin, with positive impacts on revenue growth and non-GAAP net income per diluted share beginning in 2027.

The combined company will serve 17 of the 20 U.S. News Best Hospitals, according to the announcement. Waystar also reported preliminary second quarter 2025 revenue of approximately $271 million, representing about 15% year-over-year growth.

The transaction is anticipated to close by year-end 2025, subject to customary closing conditions and regulatory approvals.

In other recent news, Waystar Holding has been the focus of several significant developments. Fitch Ratings upgraded Waystar’s Long-Term Issuer Default Rating to ’BB’ from ’BB-’, citing reduced leverage expectations, with EBITDA leverage decreasing to 3.4x in fiscal 2024. Similarly, S&P Global Ratings raised Waystar Technologies Inc.’s issuer credit rating to ’BB-’ from ’B+’, highlighting the company’s stronger market position and decreasing leverage. These upgrades reflect positive financial adjustments and a stable outlook for the company.

Mizuho initiated coverage on Waystar with an outperform rating, setting a price target of $48.00, while Canaccord Genuity reiterated its Buy rating with a $47.00 price target ahead of the company’s second-quarter earnings report. In corporate governance, Waystar announced the addition of Aashima Gupta from Google Cloud and Michael Roman, former Executive Chairman and CEO of 3M, to its Board of Directors. Furthermore, EQT Partners Inc., Bain Capital L.P., and the Canada Pension Plan Investment Board reduced their combined ownership in Waystar by selling 14.4 million shares through a public offering. These developments suggest a dynamic period for Waystar, with notable changes in both its financial and leadership landscapes.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.