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Life Health > Health Insurance

Inovalon agrees to acquire Avalere

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A big health care data analysis firm has bought a smaller but higher-profile competitor.

Inovalon (Nasdaq:INOV) says it has agreed to acquire Avalere Health for $135 million in cash and $5 million in restricted stock.

The companies hope to complete the deal Sept. 1.

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Inovalon, a Bowie, Md.-based company started in 1998, has data on 769,000 physicians, 261,000 clinical facilities, and 123 million Americans. The company ended 2014 with about 1,600 full-time employees and 9,000 part-time employees, according to the company’s 2014 financial report.

Inovalon reported $26 million in net income for the second quarter on $118 million in revenue. In 2014, relationships with Independence Blue Cross and Anthem Inc. (NYSE:ANTM) accounted for about 23 percent of the company’s revenue.

Dan Mendelson, a former director for health at the White House Office of Management and Budget (OMB), founded Avalere in 2000, after leaving OMB.

Dan Mendelson

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The privately held firm has focused on selling data analysis services to companies in the pharmaceutical and life sciences industries, including 13 of the 15 biggest pharmaceutical companies. 

Avalere generated $47 million in 2014 and employs about 200 health policy specialists, according to Inovalon.

Even though Avalere is smaller than Inovalon, it has made news in recent years by publishing a series of high-profile reports about the effects of the Patient Protection and Affordable Care Act (PPACA) and other government health policies and programs.

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Inovalon said it wants to run Avalere as a stand-alone business in its current location, with Mendelson continuing to manage day-to-day operations.


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