Pamplona Capital Management to buy MedAssets for $2.7bn

January 2016 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

Leading healthcare performance improvement company MedAssets is to be acquired by specialist investment manager Pamplona Capital Management, LLP, in a transaction with an enterprise value of approximately $2.7bn, or $31.35 per share.

Pamplona’s acquisition of MedAssets (which serves four out of every five hospitals in the United States) will align with Precyse, a Pamplona-owned company and a strategic partner of MedAssets, to create a national leader in end-to-end outsourced revenue cycle services, technology and education market.

“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 visualisation and utility of our data; scaling our front, middle, and back-end services businesses; and, developing offerings in patient payments and value-based reimbursement,” said Jeremy Gelber, managing director and partner at Pamplona Capital Management. “MedAssets and Precyse employees will be part of a growing, focused business that prioritises long-term value creation.”

Established in 2005, the London and New York based Pamplona provides an alternative investment platform across private equity, fund of hedge funds and single manager hedge fund investments. Following its acquisition of MedAssets, Pamplona has agreed to divest the Spend and Clinical Resource Management (SCM) segment of MedAssets – which currently serves more than 2700 hospital clients and reaches more than $450bn in gross patient revenue annually – to VHA-UHC, the nation’s largest member-owned healthcare company.

Pamplona manages over $10bn 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. The MedAssets investment is being made from Pamplona’s fourth private equity fund, Pamplona Capital Partners IV LP, a $4bn investment vehicle, raised in 2014.

“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”, said R. Halsey Wise, MedAssets’ chairman and chief executive.

Furthermore, the acquisition of MedAssets by Pamplona represents a major step in the delivery of Precyse’s intention to expand beyond its traditional offerings and, says Chris Powell, CEO of Precyse, to “positively impact providers’ clinical and financial outcomes, both in Health Information Management and beyond”.

For more than 15 years, Precyse has brought people, technology and education together to help remove barriers between clinical and financial operations, enabling healthcare organisations to thrive. In that time, Precyse has assisted nearly 5000 healthcare organisations nationwide in improving efficiency and delivering tangible outcomes.

“This is exactly why Precyse partnered with Pamplona earlier this year,” Mr Powell confirms. “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.”

The Pamplona/MedAssets transaction requires 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 is also subject to customary closing conditions, including the approval of the merger agreement by MedAssets’ stockholders.

Pamplona’s financial advisers for the transaction are Morgan Stanley and Barclays while Simpson Thacher & Bartlett LLP is serving as legal adviser. Additionally, Pamplona has received committed financing from Morgan Stanley, Barclays, Macquarie and Golub Capital.

Fraser Tennant