Sixth Street, Goldman invest in $7b merger of Datavant and Ciox Health

Also involved in financing the deal is an existing investor group 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.

Datavant, which helps healthcare organizations secure data, and Ciox Health, a clinical data exchange, agreed to merge in a deal valued at $7 billion. The transaction is being backed with a significant new investment from Sixth Street with participation from Goldman Sachs Asset Management’s West Street Strategic Solutions. Also involved in financing the deal is an existing investor group 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. Upon closing, the merged company, to be called Datavant, will be led by Ciox CEO Pete McCabe as CEO, and Datavant CEO Travis May as president.

Press Release

Datavant, the leader in helping healthcare organizations securely connect their data, and Ciox Health, the leader in clinical data exchange, today announced that they 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 be the nation’s largest health data ecosystem, enabling 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.

Datavant’s combined ecosystem will now include:

More than 2,000 U.S. hospitals and more than 15,000 clinics
More than 120 health plans
More than 100 health data analytics companies
More than 30 life science companies
More than 70 academic institutions and non-profits
More than 75 state, local, and federal government agencies

“The fragmentation of health data is one of the single greatest challenges facing the healthcare system today,” said Pete McCabe, CEO of Ciox Health. “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 Travis May, CEO of Datavant. “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 & President, 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., & 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.

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 merger is subject to regulatory approvals and is expected to close in the third quarter of 2021. 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.

About Datavant

Datavant’s mission is to connect the world’s health data to improve patient outcomes. Datavant works to reduce the friction of data sharing across the healthcare industry by building technology that protects the privacy of patients while supporting the linkage of de-identified patient records across datasets. Datavant is headquartered in San Francisco.

About Ciox Health

The Ciox platform leverages the industry’s most extensive clinical data network to connect data, improve patient outcomes, and lower healthcare costs. Ciox simply and securely connects healthcare decision makers with the data and hidden insights in patient medical records. Through its solutions for data acquisition, release of information, clinical coding and data abstraction, Ciox helps customers securely and consistently solve last mile challenges in clinical interoperability to support a range of needs, from research to revenue cycle.

About New Mountain Capital

New Mountain Capital is a New York-based investment firm that emphasizes business building and growth, rather than debt, as it pursues long-term capital appreciation. The firm currently manages private equity, credit, net lease real estate and public equity funds with over $30 billion in assets under management. New Mountain seeks out what it believes to be the highest quality growth leaders in carefully selected industry sectors and then works intensively with management to build the value of these companies. For more information, please visit www.newmountaincapital.com.

About Sixth Street

Sixth Street is a global investment firm with over $50 billion in assets under management and committed capital. Sixth Street uses its long-term flexible capital, cross-platform team, and data-enabled capabilities to pursue thematic opportunities and provide solutions for companies across all stages of growth. Select current and past representative Healthcare and Life Sciences investments include Biohaven, Caris Life Sciences, Clovis, DrFirst, Immunogen, Ironwood, MDLIVE and Nektar. Founded in 2009, Sixth Street has more than 320 team members including over 145 investment professionals operating from nine locations around the world. For more information, visit www.sixthstreet.com or follow us on LinkedIn.

About Roivant Sciences

Roivant’s mission is to improve the delivery of healthcare to patients by treating every inefficiency as an opportunity. Roivant develops transformative medicines faster by building technologies and developing talent in creative ways, leveraging the Roivant platform to launch ‘Vants’ – nimble and focused biopharmaceutical and health technology companies. For more information, please visit www.roivant.com.

About Goldman Sachs Asset Management and West Street Strategic Solutions

Bringing together traditional and alternative investments, Goldman Sachs Asset Management provides clients around the world with a dedicated partnership and focus on long-term performance. As the primary investing area within Goldman Sachs (NYSE: GS), we deliver investment and advisory services for the world’s leading institutions, financial advisors and individuals, drawing from our deeply connected global network and tailored expert insights, across every region and market—overseeing more than $2 trillion in assets under supervision worldwide as of March 31, 2021. Driven by a passion for our clients’ performance, we seek to build long-term relationships based on conviction, sustainable outcomes, and shared success over time. West Street Strategic Solutions Fund I, L.P. (WSSS I) is Goldman Sachs’ $14 billion flagship alternative investing vehicle focused on direct origination of credit and structured equity opportunities across market conditions, with an emphasis on bespoke solutions for high quality borrowers. Follow us on LinkedIn.