Experian announced that it has signed a definitive agreement to acquire Medical Present Value, Inc. (MPV), a leading provider of data, analytics and software in the US healthcare payments market.

Why this Service?  Healthcare providers in the US face growing challenges when it comes to billing, coding and collecting for healthcare services. The rules governing healthcare payment plans are increasing in complexity and involve frequent changes to policies. In addition, patients are becoming responsible for a larger proportion of their healthcare bills through higher deductibles and benefit plans for which the patient co-pays. This is causing healthcare practitioners to make greater use of data and analytics in order to manage their billings cycle.

MPV maintains a comprehensive database of healthcare claims data and serves over 300 major physician groups and academic medical institutions.

Why this Acquisition?  Experian entered the US healthcare payments sector in 2008 with the acquisition of SearchAmerica, as part of its strategy to expand its core data and analytics into new customer segments (vertical markets).  Providing a strong strategic fit with SearchAmerica, the acquisition of MPV broadens Experian’s addressable market to now include large physician practices and create product synergies across the full healthcare payments lifecycle. The acquisition also provides access to MPV’s unique data sources, comprising commercial and government contract data covering approximately 90% of all insurance plan members in the US.

Financial performance:
MPV has highly attractive financial characteristics. Revenues are largely subscription based, with renewal rates in excess of 95% and average contract duration in excess of four years. Compound annual revenue growth over the past three years has exceeded 30%, driven by new business wins. In the year to 31 December 2012, Experian expects MPV to deliver approximately $45m of revenue and EBIT in excess of $10m. The acquisition will be earnings enhancing in the first full year of ownership.  The purchase price is US$185m which will be funded from Experian’s existing cash resources. The transaction is subject to customary US regulatory approval.

MPV is being acquired from investors, including Rho Ventures and Centerpoint Ventures, and MPV employees and management (who are staying with the business). The assets acquired will form part of Experian’s North America Credit Services division.

Source: Experian Press Release