MedAssets: Checking in to Nasdaq

In the U.S., there are about 5,700 acute care health systems. No doubt, they face lots of pressure from things like reimbursement, rising costs, government regulation, and so on. In fact, according to a study from the American Hospital Association, about 25% of community hospitals had negative margins.

Well, for MedAssets this is a big opportunity. And, to help propel the growth, the company has filed for an IPO.

Basically, the company has technology that helps improve operating margins and cash flows for hospitals. The improvements typically range from 1.5% to 5.0% of revenues. A critical piece of the technology is MedAssets' proprietary database, which includes 4 million products and information on 160,000 different charges.

It's turned out to be a great business. Over the past four years, MedAssets revenues have shown a compound annual revenue growth rate of 41.4%. As of last year, revenues were $146.2 million and adjusted EBITDA was $50.8 million. Keep in mind that MedAssets estimates that the size of its market is roughly $6.5 billion.

The lead underwriters on the IPO include Morgan Stanley (NYSE: MS) and Lehman Brothers (NYSE: LEH). The proposed ticker is MDAS. You can find the prospectus at the SEC website.

Also, if you want to check out more IPO filings, click here.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements.