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MedAssets Signs Agreement to Acquire Sg2, Shares Slide

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MedAssets, Inc. entered a definitive agreement to acquire a provider of healthcare market intelligence, strategic analytics and clinical consulting services Sg2 for roughly $142 million. MedAssets will finance the acquisition of the privately held company by using its cash on hand and borrowings under its existing credit facility. However, shares of MedAssets slid 1.6% following the announcement till the last trading session.

Sg2 is a leading provider of healthcare market intelligence, strategic analytics and clinical consulting services. It serves more than 1,400 hospitals and health systems and helps them integrate, prioritize and drive growth and performance across the continuum of care.

Sg2's strategic analytics and clinical business intelligence services are actually complemented by MedAssets’ Advisory Solutions capabilities, which include clinical resource management, process improvement, workforce management, revenue cycle consulting, and clinical, cost and operational analytics.

MedAssets expects to benefit from this acquisition as Sg2’s predictive analytics and intelligence services will assist hospitals and health systems understand market dynamics and capitalize on growth opportunities. Hence, the acquisition will lead to the achievement of the common goal of delivering greater value to healthcare clients by both the companies.

With the acquisition, Sg2 will be able to utilize the sales and distribution channel of MedAssets for marketing its software and services. Further, it would result in addition of proprietary cost, claims reimbursement, and episode-of-care datasets and tools from MedAssets into Sg2 services, creating a new product for healthcare providers.

MedAssets is a healthcare performance improvement company, which caters to the needs of over 4,400 hospitals and 122,000 non-acute healthcare providers. It focuses on helping healthcare providers realize financial and operational gains to serve the needs of their community.

Currently, MedAssets carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the medical services industry include Air Methods Corp. , ICON Public Limited Co. (ICLR - Free Report) and PAREXEL International Corp. . Air Methods and ICON sport a Zacks Rank #1 (Strong Buy) while PAREXEL International carries a Zacks Rank #2 (Buy).

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