MedAssets to acquire the Broadlane Group for $850 million

MedAssets, a healthcare technology provider, has announced that it will purchase the Texas-based medical supply chain management company Broadlane Group in a bid to reduce hospital costs.

The merger, which cost MedAssets an estimated $850 million, should have an effect on hospital costs by providing access to supply chain solutions, outsourcing and workforce management services. MedAssets will pay $725 million upfront for the deal, and an additional $125 million at the start of 2012. The company expects to save $20 million in 2011 alone.

Together, the two companies would have reported a net revenue of $508.9 million.

"The Broadlane Group and MedAssets are an outstanding strategic fit, and this combination offers numerous benefits for our clients and stakeholders. We are bringing together some of the best contract pricing in the industry, with highly complementary technology and clinical consulting expertise from both companies," said John Bardis, chairman, president and CEO of MedAssets.

The Broadlane Group's chairman and CEO, Patrick Ryan, is expected to join the MedAssets board of directors.