Healthcare Business News

Premier moves more heavily into cost analytics with MEMdata deal

By Rachel Landen
Posted: April 8, 2014 - 2:15 pm ET

Charlotte, N.C.-based national healthcare alliance Premier announced on Monday that it has acquired MEMdata, an equipment planning, sourcing and analytics business that it anticipates will help providers reduce their costs on capital equipment and construction.

MEMdata does this in two ways: One is through the use of an electronic request for proposal process and proprietary databases that give healthcare executives equipment specifications and pricing information. The other is through equipment and medical space planning, inventory, procurement and project management services. On average, the College Station, Texas-based company estimates that its services help its clients save 18% of their total capital equipment budget.

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The deal seems a logical one for Premier, one analyst wrote.

“It is in-line with the company's growth in its analytics platform aimed at reducing the overall cost of medical supply and equipment purchasing,” Michael Cherny, managing director at ISI Group, wrote in a note published Monday following Premier's announcement. Premier may pursue other similar deals, merging target companies with complimentary technology, borrowing to fund such deals as well as use funds raised from its recent initial public offering, Cherny said.

“MEMdata provides a highly differentiated capital equipment and construction solution with a proven track record of realized savings for its customers,” Premier COO Michael Alkire said in a news release. “We believe this transaction will strengthen our ability to connect our contracted suppliers with our members to drive innovative solutions and lead generation.”

Premier provides members of its alliance, which includes more than 2,900 hospitals, nearly 100,000 other providers and 400,000 physicians, with data and analytics, advisory and supply chain services.

In Premier's most recent quarterly report issued in February for the period ended Dec. 31, 2013, management announced that it anticipates increased focus on scale and cost containment in the healthcare industry to result in greater demand for its supply chain services.

Premier went public last fall, closing its IPO in October with proceeds of approximately $821.7 million. Financial terms of the deal with MEMdata have not been released, though Premier did announce that it does not expect the acquisition to have a material effect on its 2014 financial results.

Follow Rachel Landen on Twitter: @MHrlanden

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