MedAssets to Pay $850M to Acquire Broadlane Group
"As a combined entity, we offer a strategic opportunity for our clients to drive operating expenses down while improving quality of care," Ryan said. "The collective strengths of The Broadlane Group and MedAssets will provide expanded supply chain capabilities, and further enhance the financial improvement opportunities, both near and long-term, for our healthcare provider clients."
The agreement calls for MedAssets to purchase The Broadlane Group for approximately $850 million in cash, with $725 million to be paid at closing and $125 million to be paid in January 2012. MedAssets has obtained financing from J.P. Morgan and Barclays Capital.
MedAssets said the combined company will offer:
- An industry leader that can reduce hospital costs with supply chain management operations that include group purchasing, strategic sourcing, medical device or PPI cost management, centralized procurement, supply chain outsourcing, supply chain analytics and data services, lean process consulting expertise, and a clinical workforce or labor management solution;
- A group purchasing portfolio that gives providers high compliance pricing and flexible contracting for commodity products and purchased services;
- Software-as-a-Service-based revenue cycle technology and revenue cycle consulting and extended business office services that increase net revenue capture and cash flow improvement for healthcare providers with low upfront cost and a return on investment in months;
- Approximately 85% recurring revenue with high client retention and minimal client concentration;
- A national sales force and client service teams to expand use of the combined companies' services to new and existing clients;
- Strategic support to help healthcare providers stay viable in the anticipation of healthcare reform and related financial/operational challenges.
John Commins is a senior editor with HealthLeaders Media.
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