Key Takeaways
- Waystar acquires 100% of Iodine Software.
- The companies are expected to combine AI models to improve the healthcare payment platform.
- The acquisition is expected to improve Waystar’s financials in 2025 and beyond.
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Waystar Acquires Iodine Software Implementing AI into Healthcare Payments
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The acquisition led by Advent International will see the two AI-powered companies combine forces to improve the healthcare payment system.
Waystar will acquire 100% of Iodine from shareholders.
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Waystar, in a deal led by global private equity investor Advent International, will acquire 100% of Iodine from shareholders. The transaction is funded by a fifty-fifty split between cash and stock considerations and provides Waystar shareholders 92% ownership of the combined company on a fully diluted pro forma basis, while Iodine equity holders will see approximately 8% of ownership.
Mike Kadyan, Co-Founder and Chairman of Iodine Software spoke on the impact of the acquisition, saying, "Our success has been driven by strong partnerships, continuous innovation, and meaningful outcomes. We look forward to delivering even greater outcomes for providers as part of Waystar's market-leading platform." 1
The acquisition continues Waystar’s track record of mergers and acquisitions, with the company expecting immediate impact on:
- Gross margins
- Adjusted EBITDA margins
- Non-GAAP net income per diluted share in 2027
- Overall revenue growth
The future of healthcare payments
Iodine established its trust with AI-powered clinical intelligence software IodineIQ. The technology is employed by over 1,000 different healthcare systems, with an estimated 60 million denied claims annually due to administrative errors in care delivery and submission. IodineIQ delivers real-time insights and automates mid-revenue cycle connecting clinical documentation, utilization management, and prebill workflows from admissions to claim submission.
Waystar’s integration of IodineIQ provides the ability to decrease the estimated $440 billion in administrative costs annually, as Waystar’s decade-long background of integrating AI across healthcare payment platforms has resulted in simplifying payments for end users and cutting revenue. Pairing this with Iodine’s leadership in clinical intelligence software, Waystar is preparing to leverage proprietary AI models representing over a third of all U.S. inpatient discharges to achieve the decrease.
Matt Hawkins, Chief Executive Officer of Waystar talked about the goals of Waystar following the acquisition noting, "Our mission is to simplify healthcare payments by eradicating unnecessary denied claims, automating manual work, and increasing transparency for providers and patients. We are committed to transforming healthcare through harnessing the power of AI to tackle the most critical challenges in healthcare payments. Welcoming Iodine's talented team and clinical intelligence platform to Waystar is a terrific next step in achieving our mission." 1
AI-powered benefits
The acquisition is set to bring a plethora of benefits including full automation of platforms through AI, improvements on AI models IodineIq and AltitudeAI, expanding the relationships between Waystar and premier healthcare systems, and enhancing Waystar’s financial profile.These benefits are expected to help expand Waystar’s total addressable market by 15%, as well as make Waystar the go-to service provider for over 75% of U.S. news best hospitals.
With an anticipated closing date at the end of 2025, Waystar is expected to maintain its strong balance sheet following completion of the transaction while also seeing it’s adjusted net leverage ratio close at three and a half times its original ratio.
Lauren Young and Carmine Petrone, managing directors at Advent, spoke on the acquisition in a press release, saying, "It has been a privilege to partner alongside the Iodine team as they have built a category-defining AI-powered revenue cycle platform consistently delivering exceptional ROI to its clients, we are excited to build on that foundation together with Waystar to drive even greater impact across healthcare, empowering organizations to optimize their financial performance."1
Sources
- Waystar to Acquire Iodine Software, Accelerating the AI-Powered Transformation of Healthcare Payments Waystar July 23, 2025 https://www.prnewswire.com/news-releases/waystar-to-acquire-iodine-software-accelerating-the-ai-powered-transformation-of-healthcare-payments-302512405.html
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