Waystar Buying Iodine Software to Leverage Its AI Capabilities

Lehi, Utah-based Waystar (Nasdaq: WAY), a provider of healthcare payment software, has agreed to buy Iodine Software from private equity investors for $1.25 billion.

Waystar serves approximately 30,000 clients, representing over 1 million distinct providers. Its platform processes over 6 billion healthcare payment transactions, including over $1.8 trillion in annual gross claims and spanning approximately 50% of U.S. patients. 

Austin, Texas-based Iodine Software is used by more than 1,000 hospitals and health systems, The company says it delivers real-time insight and automation across the mid-revenue cycle: connecting clinical documentation, utilization management, and prebill workflows from admission through claim submission.

Waystar said that through the acquisition it expects to unlock new automation throughout its platform, leveraging Iodine's AI capabilities in clinical documentation integrity, utilization management, and prebill revenue leakage identification.

The company said the addition of these solutions is expected to expand Waystar's total addressable market by more than 15%.

Integrating Iodine's clinical data assets with Waystar's data network is expected to enhance the impact and reach of Waystar AltitudeAI. Waystar expects to create opportunities that quickly expand GenAI applications in prior authorizations, claims management and processing, denial prevention, and appeals. Iodine's proprietary clinical AI engine, IodineIQ, continuously trains on millions of patient encounters and billions of clinical data points to deliver relevant insights.

"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, in a statement. "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."

Waystar also noted that Iodine brings strong adoption and credibility among leading hospitals and health systems. Iodine's footprint is expected to expand Waystar's scale and deepen relationships with these providers. 

Waystar also believes it will benefit from Iodine's fully subscription-based revenue model as well as significant cross-sell potential to both companies' client bases. In addition, Waystar has identified more than $15 million in run-rate cost synergies, to be realized within the first 18 to 24 months following closing.

The transaction will be funded with a 50/50 mix of cash and stock consideration. Upon closing of the transaction, current Waystar shareholders will own approximately 92% of the combined company on a fully diluted, pro forma basis and Iodine equity holders will own approximately 8%. Advent International, Iodine's largest shareholder, is expected to only receive Waystar shares in connection with the transaction and will agree to be locked up for 18 months after closing.

The transaction is anticipated to close by year-end 2025, subject to closing conditions and regulatory approvals.

Waystar expects second-quarter 2025 revenue to be approximately $271 million, representing approximately 15% year-over-year growth.