MEDNAX Inc. (NYSE:MD) recently announced the acquisition of a private physician group practice – Associated Anesthesiologists – in Reno, Nevada. Although the details of the transaction have been kept under wraps, the acquisition was executed in cash and is expected to prove immediately accretive to earnings.
Associated Anesthesiologists is the largest anesthesia practice in northern Nevada, which provides anesthesia care across many subspecialty areas, including orthopedic, obstetric, pediatric and cardiac and critical care.
The practice employs 56 anesthesiologists (49 full-time and 7 part-time) who serve Renown Regional Medical Center, an 808 bed facility and the only children’s hospital and emergency room. Additionally, it provides services to Nevada Medical Center, Carson Valley Medical Center and various ambulatory surgical centers throughout the region.
This deal will expand MEDNAX’s presence across Nevada. Apart from pediatric and other multiple specialty services, the acquisition will allow the company to provide anesthesia services in the state.
Buyout Synergies
MEDNAX continues to benefit from its strategy of executing frequent acquisitions. In the second quarter of 2016, the company closed three buyouts. Management noted that almost 86% of the quarter’s revenue growth (14.1% year over year) came from the recent acquisitions.
After the second quarter, MEDNAX completed the acquisition of Revenue Cycle Management (RCM) provider Cardon Outreach for $400 million. The company also acquired a pediatric cardiology practice in Virginia
To date in 2016, the company has acquired nine physician practice including Associated Anesthesiologists.
Q2 Results
Revenues increased 14.1% year over year to $772 million, primarily driven by higher contributions from acquisitions. Same-unit revenues increased 2% in the reported quarter and EBITDA rose 7.4% to $168 million.
Adjusted earnings (including stock based compensation) were 98 cents, up 1% from the year-ago quarter.
For the third quarter, MEDNAX expects earnings in the range of $1.09 to $1.13 per share. EBITDA is forecasted to increase in the range of 7%--11%. Same-unit revenue growth is estimated in the band of 1%--3%.
Some notable medical companies are Natus Medical Inc. (NASDAQ:BABY) , Heska Corporation (NASDAQ:HSKA) and Masimo Corporation (NASDAQ:MASI) .
MASIMO CORP (MASI): Free Stock Analysis Report
NATUS MEDICAL (BABY): Free Stock Analysis Report
HESKA CORP (HSKA): Free Stock Analysis Report
MEDNAX INC (MD): Free Stock Analysis Report
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