MedAssets Completes Acquisition of The Broadlane Group
ATLANTA--(BUSINESS WIRE)--
MedAssets, Inc. (NASDAQ: MDAS) today announced that it has completed its
acquisition of The Broadlane Group. The combination of MedAssets and
Broadlane creates the industry's leading, end-to-end financial
improvement partner that has saved billions for its healthcare provider
customers, including more than $2.8 billion in documented and guaranteed
supply chain savings.
As one of the nation's largest supply chain management companies,
MedAssets currently manages approximately $41 billion in total supply
chain spending by hospitals and other healthcare providers. The Company
has the expertise to help customers achieve even greater financial
improvement through its suite of technology-enabled products and
services. The numerous benefits include:
-
A leading-edge group purchasing organization (GPO) that offers
flexible contracting strategies for commodity products and purchased
services, from multi-source to high-compliance programs, with
high-commitment programs that save an average of 15% or more on supply
spend;
-
Clinical consulting expertise proven to reduce the cost of implantable
medical devices or physician preference items (PPI) by up to 18% or
more by engaging and aligning physicians in savings initiatives to
support long-term change without compromising quality;
-
Technology solutions with actionable analytics that identify
opportunities to maximize contract compliance and pricing, and address
costs at the service line, MS-DRG and physician levels;
-
Outsourced supply chain solutions that deliver margin improvement
through contract compliance, overcharge elimination and price parity;
and
-
Industry-leading Web-based revenue cycle technology and services that
drive cash flow improvement and increase net revenue by up to 3%.
End-to-End Financial Improvement Partner
"The future of supply chain management for healthcare providers will not
be determined by group purchasing alone. The MedAssets value proposition
will define the industry with the best-priced contract purchasing
portfolio, wrapped with leading supply chain technologies and service
line measurement tools," said John Bardis, chairman, president and chief
executive officer of MedAssets. "Our core strategy is to enable broader
clinical, financial and operating effectiveness throughout our nation's
health system. This strategic business combination enables MedAssets to
deliver end-to-end cost management capabilities to healthcare providers.
"With the new health insurance reform legislation, healthcare providers
need to fundamentally transform their operating cost structures and
reduce their overall cost of care delivery in order to essentially
breakeven on Medicare rates while continuing to deliver high-quality
clinical outcomes and operational results," Bardis added. "MedAssets now
has a much greater breadth of capabilities to help drive down total
hospital costs by offering an unparalleled group purchasing and supply
chain cost management model that leverages data, analytics, consulting
and outsourcing to drive clinical and operating effectiveness."
Strong Growth Profile
From a shareholder perspective, MedAssets is now uniquely positioned as
a leading provider of Spend Management and Revenue Cycle Management
solutions. The collective strengths and combined business models
enhances MedAssets' revenue and growth profile, and is supported by high
recurring revenue and cash flow and profit expansion opportunities, such
as:
-
A significantly enhanced market position as one of the largest
provider-based supply chain management companies managing
approximately $41 billion of supply chain spending for healthcare
providers;
-
A company with high customer retention and more than 85% recurring
revenue;
-
Sizable revenue growth potential as customers migrate to the best
contract pricing, which should drive greater contract compliance, or
purchasing volume, and increased administrative fees;
-
The opportunity to leverage MedAssets' national sales force and
customer management teams to introduce and expand utilization of the
Company's medical device and clinical consulting expertise, lean
process consulting, workforce management, supply chain outsourcing,
centralized procurement, revenue cycle technology and services, and
robust technology capabilities to new and existing customers;
-
Expected cost savings in excess of $20 million to be realized in 2011;
and
-
Very strong cash flow characteristics which enable the Company to
focus on maintaining moderate leverage and a strong liquidity position
while quickly paying down debt.
Terms of Financing
To fund the transaction, MedAssets successfully obtained the following
financing:
-
$635 million Term Loan at LIBOR plus 3.75%, with a LIBOR floor of
1.50%, due 2016
-
$325 million aggregate principal amount of 8.00% senior notes due 2018
-
$150 million revolving credit facility at LIBOR plus 3.75%, due 2015;
$20 million drawn at closing
Updated 2010 Financial Guidance Scheduled for November 30th
As previously communicated, MedAssets will issue updated 2010 financial
guidance on November 30th that will reflect the addition of
Broadlane, including the impact of acquisition-related restructuring
charges and deferred revenue discounts. A conference call will be held
at 8:00 a.m. EST that day to provide additional information.
About MedAssets
MedAssets partners with healthcare providers to improve their financial
strength by implementing integrated spend management and revenue cycle
solutions that help control cost, improve margins and cash flow,
increase regulatory compliance, and optimize operational efficiency. For
more information, go to www.medassets.com.
Safe Harbor Statement
This Press Release contains statements that constitute forward-looking
statements within the meaning of the Securities Act of 1933 and the
Securities Exchange Act of 1934, as amended by the Private Securities
Litigation Reform Act of 1995. Forward-looking statements contained in
this Press Release include the intent, belief or current expectations of
the Company and members of its management team with respect to the
Company's future business operations as well as the assumptions upon
which such statements are based. Forward-looking statements include
specifically, but are not limited to: 2010 and 2011 projections, and the
Company's ability to successfully integrate, achieve and capitalize on
synergies associated with the proposed acquisition of The Broadlane
Group. Additional factors that could cause actual results to differ
materially from those contemplated within this Press Release can also be
found in the Company's Risk Factor disclosures in its Form 10-K and Form
10-Q filed with the Securities and Exchange Commission on March 1 and
October 28, 2010, respectively. The Company disclaims any responsibility
to update any forward-looking statements.
mdas/F
MedAssets, Inc.
Robert P. Borchert, 678-248-8194
IR@medassets.com
Source: MedAssets, Inc.
News Provided by Acquire Media
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