MedAssets Buys Accuro, Could Reach 3,300 Hospital Clients

Looking to expand its presence in hospital revenue management, MedAssets Inc. announced yesterday that it will buy Accuro Healthcare Solutions, Inc. for an estimated $350 million in cash, stock and assumed debt.

The customer reach from the combined companies is expected to total more than 3,300 U.S. hospitals. The companies combined revenues for 2007 were $278 million.

“Accuro is an outstanding strategic and complementary fit for MedAssets,” John A. Bardis, MedAssets’ chairman, president and CEO said in a press release. “The primary reason for this transaction is to increase the value we can collectively deliver to hospitals and health systems.”

MedAssets said it will pay $207 million in cash and 8.85 million shares of MedAssets stock, plus make a deferred payment of $20 million due 12 months after closing. The total value of the deal is estimated at $350 million, including Accuro’s $100 million of outstanding debt.  MedAssets said it will fund the cash portion of the deal with additional financing from Bank of America.

Private equity firm Welsh, Carson, Anderson & Stowe owns about 80 percent of Accuro. It will own about approximately 12.8 percent of MedAssets common stock when the deal closes and will be represented on its board of directors by D. Scott Mackesy, a Welsh Carson general partner.

 “We are confident about the numerous benefits as well as opportunities for synergy that this combination will offer to our customers and stakeholders,” Bardis said.

MedAssets also said it expects first quarter earnings to exceed expectations when it announces results on May 14. The company now expects to earn 5 cents to 6 cents a share, or an adjusted 10 cents to 11 cents on $58 million to $59 million in revenues.  MedAssets said the higher first quarter results are due to slightly higher-than-expected revenue and operating performance in its Spend Management segment, and in-line revenue and operating performance in its revenue cycle management business.