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Verisk Analytics, Inc. (NASDAQ:VRSK) , a leading source of information about risk, announced it has signed an agreement to acquire MediConnect Global, Inc., a leading provider of proprietary systems and services that facilitate the aggregation and analysis of medical records. Based in Sandy, Utah, MediConnect has a repository of nearly 10 million medical records that are digitized, indexed, and securely hosted online. The acquisition will further advance Verisk's position as a major provider of data, analytics, and decision support solutions in the healthcare industry.
MediConnect uses custom-built proprietary technology to deliver medical records from facilities and provider locations across six continents. The company's clients access the clinical data through a cloud-based workflow management system. MediConnect also offers scheduling, retrieval, review, data validation, and analytics.
"MediConnect has developed unique solutions for health plans to meet critical regulatory requirements, evaluate quality of care, and enhance the efficiency of reporting and analytics," said Frank Coyne, chairman and chief executive officer of Verisk Analytics. "We believe MediConnect's capabilities and extensive clinical data repository will align naturally with our Verisk Health solutions, particularly Medicare Advantage revenue management and the Healthcare Effectiveness Data and Information Set (HEDIS), creating a more comprehensive offering for our clients and incremental revenue opportunities for our enterprise."
"We're very excited to join forces with Verisk," said Amy Rees Anderson, chief executive officer of MediConnect. "The merger will provide our customers with industry-leading, comprehensive health data and analytics from a single source. Combining MediConnect's innovative systems and services with Verisk's extensive data analytics will provide a turnkey solution that will transform the way the healthcare industry manages medical costs and improves the quality of care."
The net purchase price is $348.6 million. As part of the transaction, Verisk expects to realize approximately $25 million in tax and positive working capital benefits. The transaction is expected to close in March 2012, subject to the completion of customary closing conditions, including receipt of MediConnect shareholder and regulatory approvals. Verisk will use cash on hand and available capacity under its revolving credit facility to fund the purchase. The transaction is expected to be accretive to adjusted EPS in 2012.
Rees Anderson, who has headed MediConnect since 2004, will continue to lead the company. Under Rees Anderson's leadership, MediConnect grew significantly and currently counts among its many clients four of the five leading health insurers in the United States, based on covered lives.