Waystar to buy Iodine Software for $1.25B

Waystar (WAY) said it will acquire health AI software company, Iodine Software, for a total enterprise value of $1.25B.

The company expects that the integration of Iodine will enhance its gross margin and adjusted EBITDA margin immediately. Furthermore, Waystar projects that this acquisition will contribute to revenue growth and increase non-GAAP net income per diluted share by the year 2027.

To finance this transaction, Waystar plans to utilize a 50/50 mix of cash and stock consideration.

Once the transaction is finalized, current shareholders of Waystar will hold approximately 92% of the newly combined entity on a fully diluted, pro forma basis. Meanwhile, Iodine's equity holders will retain about 8% ownership in the merged company.

Advent International, recognized as Iodine's largest shareholder, will primarily lead the transaction. Advent is expected to receive only Waystar shares as part of this transaction, and has agreed to a lock-up period of 18 months following the closing of the deal.

Waystar also said that it expects revenue for the second quarter of 2025 around $271M. This projection reflects a year-over-year growth rate of approximately 15%.

The stock is down 4% in post market trading.