Exclusive-Healthcare software firm Waystar eyes $8 billion valuation in U.S. IPO-sources

By Echo Wang and David Carnevali

(Reuters) - Waystar Inc, a private equity-owned vendor of software that helps hospitals and doctors' practices manage their finances, has tapped banks for an initial public offering that could value it at as much as $8 billion, including debt, according to people familiar with the matter.

Waystar's owners, buyout firm EQT AB and Canada Pension Plan Investment Board (CPPIB), have hired Goldman Sachs Group Inc and JPMorgan Chase & Co to advise on the listing, the sources said.

The IPO could come later this year or early next year, subject to market conditions, the sources added, requesting anonymity because the matter is confidential. The valuation attained will also be subject to market conditions, the sources added.

EQT, CPPIB and Goldman Sachs declined to comment. Waystar and JPMorgan did not respond to a request for comment.

Waystar was formed in 2017 through the merger of Navicure and ZirMed. The company develops payment software helping clients such as large hospital systems with the collection of bills from patients.

Waystar was valued at $2.7 billion when EQT and CPPIB acquired a majority stake in the company in 2019 from Bain Capital, which stayed on as a minority investor. All three firms are represented on Waystar's board of directors.

Under EQT and CPPIB's ownership, Waystar has gained scale by acquiring some of its competitors, including eSolutions in 2020, which boosted its presence in the lucrative government health insurance market for the elderly, known as Medicare. The company now works with 1 million healthcare providers and handles more than 2.5 billion transactions annually, according to its website.

Fitch analysts, who track Waystar's outstanding debt, said the company stands to benefit from the expansion of the healthcare industry as the population ages and spending increases. The Centers for Medicare and Medicaid Services (CMS) expects national health expenditure to grow at an annual clip of 5.4% through 2031.

(Reporting by Echo Wang and David Carnevali in New York; Editing by Stephen Coates)