Leerink Partners Updates Model in Light of MedAssets (MDAS) Pending Acquisition

Leerink Partners reiterated a Market Perform rating on MedAssets (NASDAQ: MDAS), and raised the price target to $31.35 (from $22.00), to account for the company's 3Q results and pending acquisition. Leerink Partners' raised price target on MDAS is in-line with Pamplona Capital Management's proposed acquisition price for the company. The deal is expected to close in 1Q16.

Analyst David Larsen commented, "We are publishing an updated model to account for MDAS' 3Q:15 results. We are increasing our price target to $31.35 which is in-line with Pamplona Capital Management's proposed acquisition price for MDAS. The deal is expected to close in 1Q:16 and we believe the stock will continue to trade close to $31 based on the high likelihood of the deal being completed on-time and we do not expect additional bids to emerge. Under the leadership of CEO Halsey Wise, MDAS continues to take steps to drive better operating leverage, with an employee reduction program expected to reduce the workforce by ~5% by yearend and MDAS is eliminating certain revenue cycle management (RCM) products. While there is downside risk to the stock if the deal does not go through, overall we believe MDAS has done a better job of realigning its businesses and reducing costs, and we are increasing our 2015 EPS on the 3Q beat and raising our 2016 EPS estimates on stronger margin assumptions."

For an analyst ratings summary and ratings history on MedAssets click here. For more ratings news on MedAssets click here.

Shares of MedAssets closed at $29.33 yesterday.

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