© 2014 Cognizant September 15, 2014 COGNIZANT TO ACQUIRE TRIZETTO Exhibit 99.2 |
2 Today’s Presenters Francisco D’Souza CEO Gordon Coburn President Karen McLoughlin CFO Jude Dieterman President and COO of TriZetto © 2014 Cognizant |
© 2014 Cognizant 3 Safe Harbor This presentation includes statements which may constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 including with respect to the consummation of and financing for the acquisition of TriZetto, the timing of the closing, the transaction being accretive to Cognizant’s non-GAAP EPS, the effect of the acquisition on our ability to be more competitive in future deal opportunities and positively impact our future financial performance and with respect to potential revenue synergies, the accuracy of which are necessarily subject to risks, uncertainties, and assumptions as to future events that may not prove to be accurate. Factors that could cause actual results to differ materially from those expressed or implied include general economic conditions, the risk that we may not be able to consummate or obtain the expected financing for the transaction with TriZetto, the risk that we will not successfully integrate TriZetto into our business, the risk that we will not achieve the expected benefits of the acquisition of TriZetto and the factors discussed in our most recent Quarterly Report on Form 10-Q and other filings with the Securities and Exchange Commission. Cognizant undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities law. |
© 2014 Cognizant Transaction • Cognizant to acquire TriZetto • TriZetto is a leading provider of healthcare software and solutions • Purchase price of $2.7 billion in cash, subject to customary adjustments • Closing anticipated in Q4, subject to customary closing conditions Strategic Rationale • Creates a fully-integrated leader in healthcare technology and operations • Builds on long existing relationship • Accelerates our ability to address evolving client needs in a dynamic industry • Consistent with our Three Horizon strategy Financial Impact • ~$1.5 billion of potential revenue synergies cumulatively over five years • Neutral to positive impact on Cognizant’s long-term growth and margin profile • Expected to be immediately accretive to non-GAAP EPS Financing • Cash on hand and debt • $1 billion transaction financing commitment in place • Long-term financing expected to be in place at closing or shortly thereafter • No change to overall approach to capital allocation What we are announcing today 4 |
© 2014 Cognizant 5 Healthcare today: innovation + structural change • Significant portion of US economy • $2.7 trillion annual healthcare spend • Rapidly Expanding Service and Technology Market • Affordable Care Act and growth in Medicare and Medicaid • Emerging Opportunities • Provider groups becoming risk bearing entities; need administrative capability • Shift from defined benefit to defined contribution • Increased Focus on Scale and Efficiency • Changing regulatory dynamics creating competition and price pressure • Innovation Wins • Structural changes such as exchanges and high deductible health plans driving the need for new solutions Healthcare constituents need integrated technologies and services that drive efficiency, speed-to-market and innovation to meet changing landscape |
6 TriZetto at a glance • Software and solutions addressing the needs of all key segments of the healthcare value chain • core administration solutions for ~350 payers with 180 million covered lives • SaaS-based revenue cycle management (RCM) solutions for 245,000+ providers • Attractive revenue profile • Deep domain expertise • Strong financial performance* • $711 million LTM revenue • 18.4% non-GAAP LTM operating margin • ~3,700 employees in U.S. and India Revenue by Client Revenue by Type Revenue by Product * LTM ended June 30, 2014. Non-GAAP adjustments exclude stock-based compensation costs and acquisition related expenses. 80% 20% Payer Provider 66% 34% Recurring Non-Recurring 40% 23% 13% 5% 20% Payer Software Consulting Hosting BPO Provider SaaS © 2014 Cognizant Payers: Providers: |
© 2014 Cognizant 7 Complementary capabilities and a shared vision • Clients are demanding integrated solutions at a lower cost • “As-a-service” delivery platform for payers and providers • Enhances our competitiveness in important integrated deal opportunities Data Systems Process People |
Creating an integrated healthcare leader Cognizant today 16 of top 20 US Health Plans 4 of top 5 US PBMs 28 of top 30 Pharma companies 9 of top 10 Biotech companies 12 of top 15 Medical Device companies TriZetto is highly complementary • Payer software and solutions • #1 in private enterprises • #1 in fast-growing government programs • Provider RCM solutions • 245,000+ providers • #1 in rapidly emerging risk-bearing provider segment • Access to new markets • National and regional payers 8 © 2014 Cognizant |
9 Integrated stack for the healthcare industry Consulting BPS Software / IP Hosting / Infrastructure SI / Applications TriZetto Cognizant Healthcare Combined © 2014 Cognizant |
10 Key healthcare constituencies supported Payers • Health plans • Health insurers • Third-party administrators • HMOs Providers • Hospitals • Health systems • Physicians • Pharmacists • Dentists • Optometrists Consumers • Health plan members • Enrollees • Beneficiaries • Employees Financers of Care • Employers • CMS • State Medicaid & other state healthcare organizations Brokers • Insurance agents • Employee benefits consultants © 2014 Cognizant |
Adjudicate claims Contract for care, model provider contracts, service providers Design & provide benefits to enrollees, Send enrollments and premium payments for covered members Pay brokers commissions Customer service; care management; disease management Accept enrollments and benefits 11 Payer solutions overview Manage / authorize care to be provided to members enroll members, bill for premiums © 2014 Cognizant Consumers Payers Providers Brokers Financers of Care |
Payers Consumers Providers Issue patient bills / statements / eStatements Collect and post patient payments Validate payment accuracy and automate appeals 12 Provider solutions overview Receive payment for claims submitted & post to PM system © 2014 Cognizant |
13 Cognizant and TriZetto have a long-standing relationship • Rich experience providing end-to-end consulting, implementation, configuration, operations and maintenance services • Cognizant has a significant talent pool of IT and business expertise on TriZetto platforms • 1,200+ TriZetto-experienced resources • Dedicated healthcare product consulting group • Systems integration • Significant overlap of large common clients • 30+ clients covering more than 50 million lives on TriZetto platforms across various service lines © 2014 Cognizant |
14 Approximately $1.5+ billion potential revenue synergies cumulatively over next 5 years Time Impact $500M – $1B Systems Integration IT IS / Hosting Payer BPS / Provider RCM Integrated deal opportunities $200 – $300M $300 – $400M $200 – $300M © 2014 Cognizant |
Balance Sheet • Transaction financed with cash on hand and debt • $1 billion transaction financing commitment in place • Long-term financing expected to be in place at closing or shortly thereafter Capital Allocation • Significant financial flexibility with ample liquidity post-closing • Capital allocation model remains intact • Continued share repurchase in accordance with current authorization of $2 billion, which expires on Dec 31, 2015 • We do not expect additional large scale M&A in the foreseeable future Balance sheet and capital allocation 15 © 2014 Cognizant |
16 © 2014 Cognizant |