Waystar to Acquire Iodine Software, Boosting AI in Healthcare Payments
Waystar (Nasdaq: WAY), a leading healthcare payment software provider, has announced an agreement to acquire 100% of Iodine Software from shareholders led by Advent International for an enterprise value of $1.25 billion. This move aims to enhance Waystar's cloud-based platform with advanced AI capabilities, helping over one million providers reduce claim denials, cut manual work, and improve financial outcomes.
The acquisition is expected to immediately improve Waystar's gross margin and adjusted EBITDA margin and contribute to revenue growth and net income per share by 2027. Iodine is recognized for its AI-driven clinical intelligence software, trusted by top U.S. health systems. With up to 60 million claims denied yearly due to administrative errors, the combined technology will tackle these challenges head-on, potentially reducing the $440 billion in annual administrative costs faced by providers.
AI-Driven Improvements Across the Revenue Cycle
Waystar has applied AI across its software for over a decade, simplifying healthcare payments. Iodine adds a clinical intelligence layer with proprietary AI models trained on a vast clinical dataset covering more than one-third of all U.S. inpatient discharges. This integration is expected to unlock new automation opportunities in clinical documentation integrity, utilization management, and prebill revenue leakage identification.
Waystar's AI platform, AltitudeAI™, will benefit from Iodine’s data assets, enabling expanded applications of generative AI in areas such as prior authorizations, claims management, denial prevention, and appeals. IodineIQ, Iodine’s clinical reasoning engine, continuously learns from millions of patient encounters to provide timely insights.
Strengthening Provider Relationships and Market Reach
Iodine's strong presence among leading hospitals will help Waystar deepen its relationships with premier health systems. Post-acquisition, the combined company is expected to serve 17 of the 20 U.S. News Best Hospitals.
The deal is also financially strategic. Iodine’s subscription-based revenue model and cross-selling potential align well with Waystar’s business, with anticipated cost synergies exceeding $15 million within 18-24 months after closing.
Transaction Details and Financial Outlook
- The acquisition will be funded equally with cash and stock.
- Post-closing, Waystar shareholders will hold approximately 92% of the combined company, with Iodine equity holders owning about 8%.
- Advent International, Iodine’s largest shareholder, will receive only Waystar shares and agree to an 18-month lock-up.
- The deal is expected to close by the end of 2025, pending regulatory approvals.
- Waystar projects adjusted net leverage around 3.5x at closing.
Waystar also provided preliminary second quarter 2025 revenue guidance of approximately $271 million, reflecting about 15% year-over-year growth.
Voices from Leadership
Matt Hawkins, CEO of Waystar, said: "Our mission is to simplify healthcare payments by eradicating unnecessary denied claims, automating manual work, and increasing transparency for providers and patients. Welcoming Iodine’s clinical intelligence platform and talented team is a key step in this mission."
William Chan, Co-Founder and CEO of Iodine Software, added: "We’ve built a market-leading AI software company focused on helping hospitals capture the full value of care. Joining Waystar will accelerate that mission and expand the value delivered to providers."
Mike Kadyan, Co-Founder and Chairman of Iodine, emphasized the commitment to innovation and outcomes, looking forward to delivering greater results as part of Waystar.
Lauren Young and Carmine Petrone from Advent highlighted their excitement about building on Iodine’s success alongside Waystar to further empower healthcare organizations.
About the Companies
Waystar serves about 30,000 clients, representing over 1 million providers, including 16 of the top 20 U.S. News Best Hospitals. Its platform processes more than 6 billion healthcare payment transactions annually, covering around half of U.S. patients and $1.8 trillion in gross claims.
Iodine Software specializes in AI-powered clinical intelligence to reduce revenue leakage and administrative burdens. Trusted by over 1,000 hospitals and health systems, its platform connects clinical documentation, utilization management, and prebill workflows. IodineIQ, its proprietary clinical reasoning engine, analyzes millions of patient encounters and billions of data points to ensure accurate reimbursement.
Advent International is a global private equity firm with over $94 billion in assets under management and a presence in 44 countries. Advent partners with management teams to transform businesses across healthcare and other sectors.
Additional Information
Waystar will host a conference call on July 23, 2025, at 5:30 p.m. ET to discuss the transaction. The call can be accessed by dialing (800) 715-9871 (U.S. and Canada) or (646) 307-1963 (international), with conference code 8810133. A live webcast and replay will be available on Waystar’s investor relations website.
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