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Broadlane to be acquired by MedAssets

September 15, 2010

Broadlane Inc., a Dallas-based firm that provides a VMS to the healthcare industry, struck a deal to be acquired by MedAssets Inc. (NASD: MDAS) for $850 million in cash.

The companies announced the agreement Tuesday, and the deal should close within 60 to 90 days pending regulatory approval.

Broadlane posted net revenue of $167.6 million in 2009 and a net loss of $3.9 million. It serves more than 1,100 acute care hospitals and 50,000 non-acute care facilities in the U.S.

MedAssets, an Alpharetta GA-based provider of revenue management and spend management software, serves more than 3,300 hospitals and 40,000 non-acute healthcare providers.

The acquisition will give MedAssets a tool to manage staffing costs around contingent labor, which it does not presently have, according to a conference call with analysts.

Broadlane Chairman and CEO Patrick Ryan is expected to join MedAssets' board of directors and take on the role of president of the company's spend management segment.

The $850 million purchase price will be paid in cash with $725 million at closing and $125 million to be paid in January 2012.

MedAssets expects $20 million of in savings from synergies in 2011 with the acquisition of Broadlane.

MedAssets posted 2009 net revenue of $341.3 million and net income of $19.9 million.