Cognizant Technology Solutions Corp. won’t cut jobs or shrink operations at Douglas County-based health care software provider TriZetto Corp., executives said following a $2.7 billion cash bid for the company on Monday.
“TriZetto runs a lean and thoughtful operation,” Cognizant president Gordon Coburn said. “We expect to keep the people at TriZetto. There are no layoffs planned.”
Privately held TriZetto, which is based in the Meridian area, employs 980 people in Colorado and 3,700 companywide.
Cognizant is a publicly traded provider of outsourcing services based in Teaneck, N.J. The company employs 31,000 in the United States, including 450 in Colorado.
Cognizant expects the deal will generate $1.5 billion in additional revenues and savings over five years, and Coburn adds the savings won’t come from the typical cost cutting sought after an acquisition.
Many of Cognizant’s health care services clients are on software platforms that TriZetto has developed or added via about 16 acquisitions made over the past 15 years.
The Affordable Care Act has put heavy pressure on providers to lower their costs and is expanding health insurance coverage to another 50 million people, said Jude Dieterman, president and chief operating officer at TriZetto.
By combining technology and services in one offering, the companies expect to lower costs for customers and gain a larger share of the market for health care payment management.
“What we are offering and the scale we will be offering — this is a new model,” Coburn said.
Revenues from health care operations currently represent about $2.5 billion, or just over a quarter of total revenues at Cognizant. TriZetto will take those health care related sales above $3 billion.
TriZetto works with about 350 health care plans and supplies software to almost 245,000 doctors and other care providers. The company , Calif. to Colorado, where it had a large presence, in 2010. It moved into a new headquarters building in April 2013, one of
Cognizant’s health care division counts about 200 customers, and the company overall has been hiring aggressively, with plans to add 10,000 U.S. jobs over the next three years.
“Denver will become a health care hub for us,” Coburn said.
Cognizant is purchasing Trizetto from Apax Partners, a London-based private-equity group that gained a majority stake in the company in 2008 for $1.2 billion. Minority shareholders BlueCross BlueShield of Tennessee and Cambia Health Solutions will also sell their interests.
The deal is expected to close in the fourth quarter.
Aldo Svaldi: 303-954-1410, asvaldi@denverpost.com or twitter.com/aldosvaldi
