MedAssets $350 million purchase of its competitor Accuro Healthcare Solutions continues the groups shift toward becoming a revenue-cycle management provider, according to company executives.
Alpharetta, Ga.-based MedAssets roots are steeped in group purchasing and supply-chain management, but since 2003and more recently, after going public last yearthe company has targeted the revenue cycle for hospitals, said John Bardis, chairman, president and chief executive officer during an investors conference call discussing the acquisition. The addition of Dallas-based Accuro adds two critical components of the management cycle that MedAssets lacks, he said. Revenue-cycle management business accounted for $80.5 million of MedAssets $188.5 million total net revenue for 2007, according to its annual report.
With Accuros patient-bill estimate and medical-necessity product tools, MedAssets will be able to offer clients a comprehensive suite of Web-based applications for hospitals to manage patients from front-end operations to clinical stays through post-discharge billing, Bardis said. Currently, 90% of MedAssets clients dont have those two tools, which will be some of the first introduced after the companies come together, he said.
MedAssets signaled its intent to buy new companies when it went public (Dec. 24/31, 2007, p. 6). Accuro followed MedAssets by scheduling its own initial public offering in January, and the company approached Accuro about a merger after it announced the planned IPO, Bardis said. MedAssetswhich also picks up TPMS, Framingham, Mass., a company Accuro bought in Aprilis not going to actively pursue new purchases while it meshes the organizations, he said.
Welsh, Carson, Anderson & Stowe, the investment firm with an 80% ownership in Accuro, will hold about 12.8% of MedAssets common stock after the acquisition closes, and one of its partners will sit on the board of directors.
The deal, expected to close within 90 days, includes $207 million in cash, $100 million in outstanding debt and a deferred payment of $20 million after one year, as well as 8.85 million shares of MedAssets stock.