This excerpt taken from the HURN 8-K filed Jul 9, 2008.
Huron Consulting Group Acquires Stockamp & Associates
CHICAGO July 8, 2008Huron Consulting Group Inc. (NASDAQ: HURN), a leading provider of financial and operational consulting services, today announced the acquisition of Stockamp & Associates, Inc., a nationally recognized management consulting firm specializing in helping high-performing hospitals and health systems optimize their financial and operational performance.
Huron aims to become the best health and education consulting firm globally, serving the highest levels of healthcare companies and research institutions. Joining the Huron and Stockamp teams will create a real powerhouse by serving multiple segments of the industry, including major health systems, academic medical centers and community hospitals, said Gary E. Holdren, chairman and chief executive officer, Huron Consulting Group. The healthcare industry is growing at an unprecedented rate, and we are very excited about the opportunity to combine Stockamps forces with ours to help clients deal with the many challenges facing this vital segment of our economy.
Uniting Stockamp with Hurons existing Health and Education Consulting business enhances our position as a premier healthcare and education services provider, added Holdren. The addition of Stockamp allows us to continue to expand our footprint in the hospital consulting space. In particular, academic medical centers will be a major target of our new combined Health and Education Consulting business.
Stockamps people are also excited about the synergies and opportunities that will come from the Huron and Stockamp combination, said Paul A. Kohlheim, president, Stockamp & Associates. Stockamp and Huron have very similar corporate cultures, and we believe that our people will quickly form a strong team that will provide unmatched services in the health and education consulting space to help our clients achieve their business objectives.
The breadth of our service offerings and the depth of experience in our combined healthcare practices should further solidify Hurons leadership in providing consulting services to hospitals, health systems and academic medical centers, said David Shade, vice president, Huron Consulting Groups Healthcare practice. Healthcare demographics in the next 30 years point to increased pressures and opportunities at hospitals and research organizations. We believe Huron is well positioned to help these institutions achieve their important societal mission.
Under the terms of the agreement, Huron has acquired the assets of Stockamp & Associates for approximately $219 million, consisting of $169 million in cash and $50 million in stock, subject to adjustment. Additional purchase consideration will be payable if specific performance targets are met. In the 12 months ended March 31, 2008, Stockamp had cash basis revenues of approximately $94 million. On a GAAP basis, including after the amortization of intangibles, the acquisition is expected to be dilutive to Hurons earnings per share in 2008 and accretive in 2009. Huron will provide 2008 guidance updates when it releases results for the second quarter of 2008.
Founded in 1990 and based in suburban Portland, OR, Stockamp & Associates consulting services around performance improvement, revenue cycle improvement, patient flow and capacity improvement and supporting information technology solutions. Stockamp has completed engagements for more than 80 hospitals and health systems during the past 18 years, including some of the largest and most prominent in the U.S. In 2007, the American Hospital Association (AHA) awarded an exclusive endorsement for Revenue Cycle and Inpatient Flow improvement services to Stockamp. In addition, KLAS Enterprises awarded Stockamp the 2007 and 2006 Best in KLAS Award for Revenue Cycle ConsultingTransformation.
In 2007, Huron was named No. 3 on Modern Healthcares list of Largest Healthcare Management Consulting Firms. Hurons employees have worked on engagements for more than 80 of the top 100 research universities, more than 50 percent of the top teaching hospitals, six of the top 10 largest healthcare systems ranked by Modern Healthcare, and 13 of the top 25 managed care organizations ranked by Atlantic Information Services.
With the acquisition, Dale Stockamp, the founder of Stockamp & Associates, will join Huron as a consultant and assist with transition and integration matters. He will also assist with major client development opportunities. Paul Kohlheim, president of Stockamp, will join Huron as a vice president and report to David Shade, who will continue to lead Hurons expanded Healthcare practice. In addition to the Stockamp employees who will join Huron, the following individuals will be managing directors with the Company: Shelly A. Anderson, James R. Dail, Douglas W. Fenstermaker, Andrew L. Grobmyer, John M. Hutchens, Norman W. Johnson, Jeffrey D. Jones, Annette E. Kirby, Bruce G. Lemon, Timothy P. Miller, Gregory P. Morgan, Steven J. Norris, Michael F. Puffe, and Kenneth M. Saitow.
In connection with this acquisition, Huron amended its credit agreement effective July 8, 2008. The amended credit agreement consists of a $220 million senior secured term loan and a $240 million senior secured revolving credit facility, both maturing in February 2012. On July 8, 2008, Huron borrowed $164 million under this credit agreement to fund the acquisition of Stockamp. The balance of the credit facility will remain available for future working capital requirements and other corporate purposes. Also in connection with the acquisition, Huron amended its 2006 agreement for the acquisition of Wellspring Partners LTD to modify the terms of the Wellspring earn-out related to the revenue cycle business. Consideration for the amendment consisted of $20 million of stock, subject to adjustment.