Pamplona Capital Management has agreed to buy MedAssets, a healthcare performance improvement company, for $31.35 per share or about $2.7 billion. Also, Pamplona has agreed to divest MedAssets’ spend and clinical resource management unit to VHA-UHC Alliance following the deal’s closing. Morgan Stanley and Barclays are providing financial advice to Pamplona on the transaction.
LONDON & NEW YORK–(BUSINESS WIRE)–Pamplona Capital Management (Pamplona) is pleased to announce it has agreed to acquire MedAssets (NASDAQ:MDAS), a leading healthcare performance improvement company that serves four out of every five hospitals in the United States. In addition, Pamplona has entered into a separate agreement with VHA-UHC Alliance NewCo, Inc. (VHA-UHC Alliance), the nation’s largest member-owned healthcare company, to divest MedAssets’ Spend and Clinical Resource Management (SCM) segment to VHA-UHC Alliance following the completion of Pamplona’s acquisition of MedAssets.
Pamplona will combine MedAssets’ Revenue Cycle Management (RCM) segment, which currently serves more than 2,700 hospital clients and touches more than $450 billion in gross patient revenue annually, with Precyse, a Pamplona-owned company that is a leader in health information management (HIM) services, technology, and education. MedAssets and Precyse already have a strategic partnership and share a number of customers, and their offerings are highly complementary.
This combined enterprise will offer an end-to-end RCM and HIM solution and will be ideally positioned to partner with health systems to meet the needs of an evolving reimbursement environment which is increasingly requiring outsourced and clinically-integrated revenue cycle solutions.
“Pamplona’s acquisition of MedAssets will create a national leader in the fully outsourced end-to-end revenue cycle services, technology and education market,” said Jeremy Gelber, M.D., Partner at Pamplona Capital Management. “Existing and prospective customers of the new, realigned company should expect a business that is dedicated to investing in integrating our technology both internally and with EMR software providers; improving the visualization and utility of our data; scaling our front, middle, and back-end services businesses; and, developing offerings in patient payments and value-based reimbursement. MedAssets and Precyse employees will be part of a growing, focused business that prioritizes long-term value creation.”
R. Halsey Wise, MedAssets chairman and chief executive officer, said, “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 the leading supply chain procurement and cost management partner as well as a prominent, end-to-end revenue cycle technology and services business in the healthcare industry.”
“This is a major step in delivering on our vision of expanding Precyse beyond our traditional offerings into other areas that positively impact providers’ clinical and financial outcomes, both in Health Information Management and beyond and exactly why Precyse partnered with Pamplona earlier this year,” said Chris Powell, CEO, Precyse. “We are excited by the opportunity to bring even more value to our clients as they look to solve new challenges with fewer vendors and to our colleagues who are mission critical to propelling us to the future we envision.”
In addition to the sale of MedAssets’ SCM business to VHA-UHC Alliance, Pamplona and VHA-UHC have agreed to work together in select service offerings to serve their mutual members and customers, representing further strategic growth opportunities for both businesses.
“Aligning MedAssets’ SCM offerings with VHA-UHC Alliance’s technologies and expertise will create a more robust experience for our collective members and customers,” said Curt Nonomaque, president and chief executive officer of VHA-UHC Alliance. “Our broader partnership with Pamplona will be similarly valuable, creating synergies that will enable us to better serve our members and customers.”
Pamplona is purchasing MedAssets for $31.35 per share, which represents a total enterprise value of approximately $2.7 billion for the acquisition.
The transaction will require the 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.
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 and Golub Capital for the transaction. The MedAssets investment is being made from Pamplona’s fourth private equity fund, Pamplona Capital Partners IV LP, a USD 4 billion investment vehicle, raised last year.
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.
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.
About VHA-UHC Alliance NewCo, Inc.
Effective April 1, 2015, VHA, 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 includes Novation, the health care services company they already jointly own. The new entity 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 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 represent more than $50 billion in annual purchasing volume.
Precyse uniquely interweaves people, technology and education to remove barriers between clinical and financial operations, enabling healthcare organizations to thrive. The company has helped nearly 5,000 healthcare organizations nationwide improve efficiency and deliver tangible outcomes for more than fifteen years. Precyse offers fully outsourced Health Information Management (HIM) Services, Medical Coding, Clinical Documentation Improvement (CDI), Medical Transcription, Cancer Registry and Oncology Data Management; an HIM Automation platform with expert workflow technologies and Natural Language Processing (NLP) that supports all inpatient and outpatient Computer Assisted Coding, and Computer Assisted CDI needs; and Precyse University™, an education solution targeted towards helping hospitals optimize coding, revenue cycle management, healthcare operations, clinical documentation, and case management practices before they hit the bottom line. Please visit www.precyse.com for more information.