"Healthcare is undergoing structural shifts due to reform, cost pressure and shifting responsibilities between payers and providers. This creates a significant growth opportunity, which TriZetto will help us capture," Francisco D'Souza, CEO of Cognizant, was quoted as saying in the statement. TriZetto and its 3,700 employees will be a part of Cognizant's existing healthcare business, which currently serves more than 200 clients including 16 of the top 20 US health plans and four of the top five pharmacy benefit management companies. Healthcare currently represents approximately 26 percent of Cognizant's revenue.
With more than $3 billion in combined healthcare revenue, Cognizant and TriZetto will serve nearly 245,000 healthcare providers (hospitals, clinics and others), as well as approximately 350 payers (health insurers) with approximately 180 million covered lives in the US. The acquisition will create a fully-integrated healthcare technology and operations leader, positioning Cognizant to address the rapidly-changing healthcare marketplace -- currently 17 percent of US gross domestic product (GDP)-- with next-generation solutions that increase efficiency, reduce costs and improve healthcare outcomes.
Cognizant expects this acquisition to accelerate significantly its market position and strategy of delivering innovative healthcare software and solutions to a wide range of healthcare clients. TriZetto brings to Cognizant significant and complementary new market opportunities, expertise and intellectual property, including multiple industry-leading software platforms used by payers and providers; enhanced competitiveness in integrated engagement opportunities; approximately $1.5 billion of potential revenue synergies cumulatively over the next five years and attractive non-linear software revenue.
"Cognizant and TriZetto have had a long-term relationship, having jointly served a number of healthcare clients to date," said Gordon Cobura, president of Cognizant. "This acquisition is a natural fit for us. It represents a great opportunity to integrate services across our three horizons-traditional IT services; high-growth businesses such as management consulting, business process services and IT infrastructure services; and emerging delivery models-and provide even greater value to our clients," he added.
With approximately $2.5 billion in annualized revenue, Cognizant serves 28 of the top 30 global pharmaceutical companies, 16 of the top 20 health plans in the US., 4 of the top 5 pharmacy benefit management companies in the US, 9 of the top 10 biotech companies, and 12 of the top 15 medical device companies.