Waystar, a leading provider of healthcare payment software, has announced its definitive agreement to acquire Iodine Software for $1.25 billion. The acquisition, backed by shareholders led by Advent International, is set to significantly enhance Waystar’s AI-driven capabilities, particularly in the realm of clinical intelligence, and expand its total addressable market by over 15%.
Iodine’s AI-powered platform is widely trusted by top U.S. health systems for improving clinical documentation and identifying revenue cycle inefficiencies. Each year, an estimated 60 million claims are denied due to administrative issues, often stemming from errors during the post-care, pre-billing phase. By integrating Iodine’s technology, Waystar aims to eliminate such revenue leakage and drive better outcomes for healthcare providers.
The acquisition is projected to be immediately accretive to Waystar’s gross and adjusted EBITDA margins and to positively impact its revenue growth and non-GAAP earnings by 2027. The deal also adds a fully subscription-based revenue stream and opens cross-selling opportunities across both companies’ client bases.
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“Our mission is to simplify healthcare payments by eradicating unnecessary denied claims, automating manual work, and increasing transparency for providers and patients,” said Matt Hawkins, CEO of Waystar. “Welcoming Iodine’s talented team and clinical intelligence platform to Waystar is a terrific next step in achieving our mission.”
William Chan, Co-Founder and CEO of Iodine, echoed the sentiment: “From day one, our focus has been helping hospitals and health systems capture the full value of care through transformational AI. As part of Waystar, we are excited to accelerate that mission and amplify the value delivered to healthcare providers.”
The acquisition also positions Waystar to deepen ties with premier health systems. The combined organization is expected to serve 17 of the 20 top-ranked hospitals in the U.S. according to U.S. News & World Report.
Funding for the deal will consist of 50% cash and 50% stock. Post-transaction, Waystar shareholders will retain about 92% ownership of the combined entity, while Iodine’s equity holders will hold approximately 8%. Advent will receive shares and remain locked in for 18 months post-closing. The deal is expected to close by the end of 2025, pending regulatory approvals.
