HMS Holdings/HealthDataInsights, Inc.
On November 7, 2011, HMS Holdings Corp. (Nasdaq: HMSY) entered a definitive agreement to acquire privately held HealthDataInsights, Inc. for approximately $400 million.
The transaction is not contingent upon financing and is expected to close by December 31, 2011, subject to regulatory approvals.
After applying HMS’s revenue recognition methodology, HDI is projected to contribute approximately $85 million of revenue to HMS in 2012.
HMS will pay a total of $400 million for HDI. The $400 million will consist of $384 million in cash paid at closing and approximately $16 million in consideration in the form of assumption of unvested options. The cash component will be financed in part through a $350 million bank term loan facility that will be established in connection with the closing of the acquisition, and in part through corporate cash. The assumed options will be adjusted as to exercise price and number of shares to convert them into options for HMS stock. In connection with the closing, the Company also plans to establish a $100 million bank revolving credit facility. The Company anticipates cash balances in excess of $100 million at the end of 2011. The acquisition will result in financial leverage of approximately 2.5 times debt to adjusted EBITDA at the end of 2011.
Citigroup Global Markets Inc. acted as financial advisor to HMS and provided committed financing in support of the transaction. Wilmer Cutler Pickering Hale and Dorr LLP acted as legal advisor to HMS.
Morgan Stanley acted as financial advisor to HDI. Wilson Sonsini Goodrich & Rosati, Professional Corporation acted as legal advisor to HDI.
The transaction is not contingent upon financing and is expected to close by December 31, 2011, subject to regulatory approvals.
After applying HMS’s revenue recognition methodology, HDI is projected to contribute approximately $85 million of revenue to HMS in 2012.
HMS will pay a total of $400 million for HDI. The $400 million will consist of $384 million in cash paid at closing and approximately $16 million in consideration in the form of assumption of unvested options. The cash component will be financed in part through a $350 million bank term loan facility that will be established in connection with the closing of the acquisition, and in part through corporate cash. The assumed options will be adjusted as to exercise price and number of shares to convert them into options for HMS stock. In connection with the closing, the Company also plans to establish a $100 million bank revolving credit facility. The Company anticipates cash balances in excess of $100 million at the end of 2011. The acquisition will result in financial leverage of approximately 2.5 times debt to adjusted EBITDA at the end of 2011.
Citigroup Global Markets Inc. acted as financial advisor to HMS and provided committed financing in support of the transaction. Wilmer Cutler Pickering Hale and Dorr LLP acted as legal advisor to HMS.
Morgan Stanley acted as financial advisor to HDI. Wilson Sonsini Goodrich & Rosati, Professional Corporation acted as legal advisor to HDI.
