MedAssets (MDAS) Placed on CreditWatch by S&P Amid Pamplona Capital Deal

Standard & Poor's Ratings Services placed all of its ratings on MedAssets Inc. (Nasdaq: MDAS), including the 'BB-' corporate credit rating, on CreditWatch with negative implications.

"The CreditWatch placement follows the company's announcement that it will be acquired by Pamplona Capital for $2.7 billion in cash and debt," said Standard & Poor's credit analyst Michael Berrian. MedAssets will be the surviving entity. While we anticipate that MedAssets' existing debt will be refinanced as part of the acquisition, the incurrence of additional debt to finance part of the LBO is likely to result in leverage of 5x or more. This is higher than the 3x to 4x we had factored into our analysis and current rating.

We will resolve the CreditWatch when more information related to the financing and post-LBO capitalization becomes available. At that time, we would also expect to be able to assess any potential impact to our business risk assessment from the expected sale of the spend management segment to Novation and the sale or combination of the revenue cycle management business with Precyse.

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