Zacks_Analysts' Blog : Healthways to Acquire Navvis - Analyst Blog

Healthways (HWAY) recently announced that it has signed a definitive agreement to acquire Navvis & Company, a prominent provider of strategic consulting and change management services for health care systems in the U.S.  

Some of Navvis’ focus areas include leadership development, clinical integration and system physician alignment. The consideration amount is $28.7 million, consisting of $23.7 million in cash and $5 million in Healthways common stock. The deal is anticipated to have very minor impact on Healthways’ earnings per share for fiscal 2011.   

According to Healthways, Navvis provided solid support to healthcare systems for over 20 years and has maintained relationships with 6 of the top 10 systems in the nation. Healthways will join hands with Navvis to provide novel and tested capabilities to healthcare systems, employers and health plans whose purpose is to enhance well-being of the populations whom them serve.

According to Navvis, the combined entity of Healthways and Navvis will offer its customers a seamless portfolio of vital services essential for them to take on risk and become a resource in their community. Such an approach will be valuable to state and regional health plans who appreciate that outside expertise must bolster in-house capabilities to overcome complex challenges in the health care system.    

St. Louis-based Navvis is a management consulting firm with capabilities in competitive market-based strategy in the health care industry. It provides advice to physician groups, hospitals and health systems on creation of modern, market-based strategies to develop futuristic health care systems.

The Healthways model encourages people to make favorable lifestyle changes that lead to enhanced well-being, reduced healthcare costs, improved performance and economic value for customers. The company has invested in technology platforms that provide scalable support with large populations. It has tie-ups with 80% of U.S. health plans and counts 39.7 million lives in its customer base.

Due to its unique scalable business model, Healthways shares present a compelling, long-term investment opportunity although it may face many challenges in the short term. Healthways is the leader in a strategically critical and rapidly evolving part of the health care services market. Its fitness program (SilverSneakers) for seniors is available at centers across the U.S. Healthways competes with Express Scrips (ESRX) among others. Currently we are Neutral on Healthways.