MedAssets to be Acquired by Pamplona Capital Management for $2.7 Billion
ATLANTA, Nov. 2, 2015 (GLOBE NEWSWIRE) -- MedAssets, Inc. (NASDAQ:MDAS) and Pamplona Capital Management today announced that they have entered into a definitive agreement whereby Pamplona will acquire MedAssets for $31.35 per share in cash. The purchase price represents a 44.5% premium to the 30 trading day volume weighted average price of MedAssets common stock and an enterprise value of approximately $2.7 billion.
"Since February, our executive leadership team has been developing and implementing our business transformation and value creation plan to prepare MedAssets for a growth-oriented future within a value-based healthcare world. We have been making substantial progress, and our third quarter 2015 financial performance is a testament to our employees' commitment, dedication and hard work to execute our plan," said R. Halsey Wise, chairman and chief executive officer, MedAssets. "Over the last year, our progress captured the attention of outside parties, and we received a number of unsolicited inquiries expressing interest in acquiring MedAssets. Our board of directors and executive leadership team conducted a thorough review of strategic alternatives and, after careful consideration, we determined an acquisition by Pamplona is the best course of action for our shareholders, customers and employees."
The MedAssets-Pamplona transaction is expected to close in the first quarter of 2016, pending receipt of customary approvals, including certain regulatory approvals and expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. The transaction also is subject to customary closing conditions, including the approval of the merger agreement by MedAssets stockholders. MedAssets and Pamplona are confident in their ability to obtain all necessary regulatory and other approvals.
Goldman, Sachs & Co. and Deutsche Bank Securities Inc. are acting as MedAssets' financial advisors, and Willkie Farr & Gallagher LLP is acting as its legal advisor. Morgan Stanley and Barclays are serving as Pamplona's financial advisors, and Simpson Thacher & Bartlett LLP is serving as its legal advisor. Pamplona has received committed financing from Morgan Stanley, Barclays, Macquarie Group and GCI for the transaction.
Pamplona Capital Management partner, Jeremy Gelber, M.D., said: "We are excited to be acquiring this leading healthcare performance improvement platform company that serves four out of every five hospitals in the United States. As a next step to our strategy, we plan to combine the MedAssets Revenue Cycle Management (RCM) segment with our Precyse business to create a leading, end-to-end revenue cycle technology and services business. At the same time, we intend to sell the MedAssets Spend and Clinical Resource Management (SCM) business to VHA-UHC Alliance. In each case, we believe these business combinations will enable greater innovation and scale to deliver enhanced clinical, operational and financial performance improvement to positively impact healthcare organizations' outcomes."
"With the added transactional steps planned by Pamplona, we expect our customers, suppliers and employees will have an extraordinary opportunity to benefit from a significant market combination that will create both the leading supply chain procurement and cost management partner and a prominent, end-to-end revenue cycle technology and services business," Wise added.
Pamplona Transaction Plan for MedAssets Business Segments
Following completion of Pamplona's acquisition of MedAssets, Pamplona will move to complete the sale of MedAssets SCM segment to VHA-UHC Alliance and combine its Precyse business with MedAssets RCM segment. In addition to these proposed transactions, Pamplona and VHA-UHC Alliance have agreed to work together in select service offerings to serve their mutual members and customers, representing further strategic growth opportunities for both businesses.
The MedAssets-Precyse revenue cycle businesses, when combined, will offer hospitals an independent, highly complementary value proposition as healthcare organizations require sustainable revenue performance in preparation for the transition to a value- or risk-based reimbursement environment. MedAssets' RCM segment services and technologies touch more than $450 billion in gross patient revenue annually and help more than 2,700 providers optimize reimbursement by improving patient payment estimation, claims coding accuracy, contract modeling, defensible pricing and regulatory compliance strategies, and billing and collection services, among other capabilities. Precyse offers fully outsourced health information management (HIM) services along with medical coding, clinical documentation improvement (CDI) and other technologies and intelligence to equip healthcare organizations to achieve enhanced, sustainable operational performance.
The combined expertise of VHA-UHC Alliance and MedAssets SCM business is expected to help acute hospitals, academic medical centers and non-acute healthcare providers significantly improve their financial, clinical and operational performance through enhanced supply chain procurement, cost management, analytics and advisory services. Members and customers also will have the power of Sg2 market analytics at their fingertips as one of the leading providers of health care market intelligence, strategic analytics and service line-based insight.
Curt Nonomaque, president and chief executive officer of the VHA-UHC Alliance, said, "Aligning the MedAssets SCM offerings with our technologies and expertise will create a more robust performance and value proposition for our customer and membership base."
Today, VHA-UHC Alliance serves more than 5,200 health system and hospital members and affiliates, including virtually all the academic medical centers and health systems, as well as more than 118,000 non-acute health care customers representing more than $50 billion in annual purchasing volume. The MedAssets SCM business serves approximately 3,300 hospitals and 123,000 non-acute healthcare providers, and manages approximately $59 billion in total spend on behalf of its customers.
MedAssets Third Quarter Financial Results
MedAssets reported its third quarter and nine-month 2015 financial results in a press release issued concurrent with this announcement. MedAssets no longer plans to provide financial guidance, and management will not host a conference call to discuss either this transaction or its financial results.
About MedAssets
MedAssets (NASDAQ:MDAS) is a healthcare performance improvement company that combines strategic market insight with rapid operational execution to help providers sustainably serve the needs of their communities. More than 4,500 hospitals and 123,000 non-acute healthcare providers rely on our solutions to reduce the total cost of care, enhance operational efficiency, align clinical delivery, and improve revenue performance across the System of CARE. For more information, please visit www.medassets.com.
About Pamplona Capital Management
Pamplona Capital Management is a London and New York-based specialist investment manager established in 2005 that provides an alternative investment platform across private equity, fund of hedge funds and single manager hedge fund investments. Pamplona Capital Management, LLP manages over USD 10 billion in assets across a number of funds for a variety of clients including public pension funds, international wealth managers, multinational corporations, family offices and funds of hedge funds. Pamplona is currently managing its fourth private equity fund, Pamplona Capital Partners IV LP, which was raised in 2014. Pamplona invests long-term capital across the capital structure of its portfolio companies in both public and private market situations. Please see Pamplonafunds.com for further information.
About VHA-UHC Alliance
Effective April 1, 2015, VHA Inc., the national health care network of not-for-profit hospitals, and UHC, the alliance of the nation's leading academic medical centers, combined into a single organization. The combined organization is the largest member-owned health care company in the country and is dedicated to leading health care innovation, creating knowledge and fostering collaboration to help our members thrive. The company serves more than 5,200 health system and hospital members and affiliates as well as 118,000 non-acute health care customers. Members range from independent, community-based health care organizations to large, integrated systems and academic medical centers, and it represents more than $50 billion in annual purchasing volume. Headquarters are in Irving, Texas, with locations in Chicago and other cities across the United States. For more information, visit www.vha.com and uhc.edu.