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HMS Holdings (HMSY) to be Acquired by Gainwell for $3.4B

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HMS Holdings Corp. recently inked a deal with Veritas Capital backed Gainwell Technologies, wherein the latter will acquire the former in an all-cash transaction worth around $3.4 billion (shareholders of HMS Holdings to receive $37 in cash per share). Notably, the transaction is anticipated to be completed in the first half of 2021, subject to approval of the shareholders of HMS Holdings and satisfaction of necessary closing conditions that include applicable regulatory approvals.

It is worth mentioning that Gainwell will buy HMS Holdings’ capabilities focused on the Medicaid market and Veritas Capital-backed Cotiviti, Inc. will acquire the company’s abilities that are focused on the commercial, Medicare and federal markets.

From HMS Holdings’ standpoint, this transaction is a strategical one, which will enable the company to deliver certain value to its shareholders.

Significance of the Buyout

HMS Holdings has successfully established a highly differentiated set of abilities, which provide tangible value throughout the government and commercial healthcare payer spectrum.

Given the strength of market-leading healthcare technology and analytics enterprise, the buyout will enable HMS Holdings to boost its capability to offer world-class, data-driven analytical solutions to its clients.

With this buyout, HMS Holdings will further advance its objective to lower costs and enhance health outcomes across the nation.

Price Performance

Shares of the Zacks Rank #3 (Hold) stock have gained 25.3% in a year’s time, compared with the industry’s rally of 30.8%.

Stocks to Consider

Some better-ranked stocks from the broader medical space are Merit Medical Systems, Inc. (MMSI - Free Report) , Patterson Companies, Inc. (PDCO - Free Report) and McKesson Corporation (MCK - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Merit Medical has a projected long-term earnings growth rate of 12.6%.

Patterson Companies has an estimated long-term earnings growth rate of 9.6%.

McKesson has a projected long-term earnings growth rate of 6.6%.

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