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TheStreet Open House

MedAssets Closes Debt Refinancing, Lowering Interest Rate

MedAssets, Inc. (NASDAQ: MDAS) announced the completion of a new $750 million senior secured credit facility. Proceeds were used to extinguish the Company’s existing $484 million Term Loan B due 2016 and $150 million revolving credit facility due 2015, of which $90 million was outstanding, and to pay related fees and expenses.

The new senior secured credit facility consists of: a $300 million, 7-year Term Loan B bearing interest at LIBOR plus 2.75 percent subject to a 1.25 percent LIBOR floor; a $250 million, 5-year Term Loan A bearing interest at LIBOR plus 2.50 percent; and, a $200 million, 5-year revolving credit facility bearing interest at LIBOR plus 2.50 percent, of which $50 million was drawn at closing. In addition, the Company terminated forward interest rate swaps associated with the indebtedness that was refinanced.

“As a result of the favorable credit markets, we have been able to enter into a new debt arrangement to achieve a lower average cost of debt, extended maturities, and an improved covenant structure – all of which contribute to a more flexible, longer-term capital structure to support the company's growth objectives,” said Chuck Garner, executive vice president and chief financial officer.

Financial Impact of Debt Refinancing

  • The refinancing is expected to result in approximately $6 million in annual cash interest savings as the new term loans have a lower blended interest rate of approximately 3.6 percent per annum compared to the prior blended interest rate of approximately 4.9 percent per annum, assuming that LIBOR does not increase.
  • In the fourth quarter ending December 31, 2012, the Company will incur one-time charges including a write-off of approximately $20 million of non-cash deferred financing costs and original issue discount related to the refinanced indebtedness; and a swap termination charge of approximately $8 million.
  • The Company’s non-GAAP adjusted EPS guidance for the fourth quarter and full year of 2012 remains unchanged as the one-time charges will be added back in its calculation of adjusted earnings per share.
  • The Company expects the refinancing will be accretive to fiscal 2013 earnings per share by approximately $0.07.

About MedAssets

MedAssets (NASDAQ: MDAS) partners with healthcare providers to improve their financial strength by implementing revenue cycle, spend and clinical resource management solutions that help capture revenue, control cost, improve margins and cash flow, increase regulatory compliance, and optimize operational efficiency. MedAssets serves more than 4,200 hospitals and 100,000 non-acute healthcare providers. The company currently manages $48 billion in supply spend and touches over $340 billion in gross patient revenue annually through its revenue cycle solutions. For more information, go to www.medassets.com.

Safe Harbor Statement

This Press Release contains forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995, and include the intent, belief or current expectations of the Company and its management team with respect to the Company’s future business operations and financial projections and forecasts. Any forward-looking statements are not guarantees of future performance, involve risks and uncertainties, and actual results may differ materially from those contemplated by such forward-looking statements. Important factors that could cause actual results to differ materially from those contemplated within this Press Release can also be found in the Company’s Risk Factor disclosures in its Form 10-K for the year ended December 31, 2011 filed with the Securities and Exchange Commission and available at http://ir.medassets.com . The Company disclaims any responsibility to update any forward-looking statements.

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