MedAssets Inc. MDAS and Pamplona Capital Management LLP recently announced the early termination of the waiting period for Pamplona’s proposed acquisition of MedAssets under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976.
On Nov 2, 2015, Pamplona announced the signing of a definitive agreement to acquire MedAssets for $2.7 billion in cash ($31.35 per share). The purchase price reflects a 44.5% premium to the 30 trading day volume weighted average price of MedAssets common stock and an enterprise value of approximately $2.7 billion.
The transaction is now expected to be complete by the end of Jan 2016, subject to fulfilment of other customary closing conditions.
Meanwhile, MedAssets reported mixed third-quarter 2015 results. Earnings of 27 cents per share beat the Zacks Consensus Estimate by 4 cents but declined almost 7% on a year-over-year basis.
On the other hand, revenues increased 8.1% on a year-over-year basis to $190.0 million and steered past the Zacks Consensus Estimate of $188 million. The growth was primarily driven by strong results across both Spend and Clinical Resource Management (SCM) and Revenue Cycle Management (RCM) segments.
However, the revenue growth was fully offset by a spike in operating expenses, which totaled $181.5 million, up 20.1% on a year-over-year basis. The higher operating expenses were primarily attributed to 19.9%, 13.1% and 11.8% rise in selling and marketing expenses, cost of revenue and general and administrative expenses, respectively.
During the third quarter of 2015, MedAssets repurchased shares worth $16.4 million.
However, owing to the impending acquisition deal, MedAssets did not provide any financial guidance.
Zacks Rank & Other Key Picks
MedAssets currently carries a Zacks Rank #2 (Buy).
Other favorably ranked stocks in the medical sector include Air Methods AIRM, PRA Health Sciences PRAH and AMN Healthcare Services AHS. All the stocks sport a Zacks Rank #1 (Strong Buy).
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