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MEDNAX Acquires Private Practices in Minnesota and Texas
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MEDNAX Inc. (MD - Free Report) recently announced the acquisition of Northwest Anesthesia, a private physician group practice in Minneapolis, MN. The company also announced the takeover of the Children’s Eye Care of North Texas (CECNT), a private pediatric ophthalmology practice in Plano, TX.
Although the transaction details of both the acquisitions were not disclosed, the takeovers were settled in cash and are expected to prove accretive to earnings immediately.
Northwest Anesthesia’s clinical care team consists of 128 full-time equivalent clinicians (37 full-time equivalent anesthesiologists and 91 full-time equivalent anesthetists) who provide services to seven Allina Health facilities. Notably, this is the first Minnesota-based practice to join MEDNAX.
On the other hand, CECNT comprises one physician and three full-time administrative personnel that provide services in 15 hospital and clinic locations throughout North Texas. The acquisition will help the company expand its maternal-fetal, newborn nursery and pediatric subspecialty services in the North Texas market.
Buyout Synergies
MEDNAX continues to thrive on its strategy of executing frequent acquisitions. In the first quarter of 2016, the company completed four acquisitions. Management noted that 85% of the quarter’s revenue growth (18% year over year) came from recent acquisitions.
The vRad takeover (May 2015) contributed less than half of this growth, as did practice acquisitions; while Alegis accounted for the remainder. Notably, vRad is a leading provider of teleradiology services to over 2,100 healthcare companies across all 50 states, the District of Columbia and Puerto Rico.
To date, in 2016, MEDNAX completed acquisitions of private physician groups like West End Anesthesia Group, Professional Anesthesia Associates and Lighthouse Anesthesia, based in Virginia, Tennessee and Georgia, respectively. The acquisitions will help MEDNAX better serve hospital customers in the regions.
MEDNAX also bought Pediatric Ear, Nose and Throat Institute of South Texas (PENT) in San Antonio, TX. The acquisition expands MEDNAX’s service offerings in the pediatric ear, nose and throat field as it provides every kind of ear, nose and throat medical, audiology and surgical services, including ear tubes, tonsillectomies and sinus surgery.
Early last month, MedData a division of MEDNAX, acquired Duet Health, which provides patient engagement software and mHealth solutions.
We believe MEDNAX will continue to pursue acquisitions of expert private physician groups in different specialties like neonatology, anesthesiology, maternal-fetal medicine and pediatric cardiology specialties. This will drive its results over the long haul.
Zacks Rank & Key Picks
MEDNAX has a Zacks Rank #3 (Hold).
Better-ranked stocks in the same space include AMN Healthcare Services , Adeptus Health (ADPT - Free Report) and VCA Inc (WOOF - Free Report) . While AMN Healthcare sports a Zacks Rank #1 (Strong Buy), Adeptus and VCA carry a Zacks Rank #2 (Buy).
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MEDNAX Acquires Private Practices in Minnesota and Texas
MEDNAX Inc. (MD - Free Report) recently announced the acquisition of Northwest Anesthesia, a private physician group practice in Minneapolis, MN. The company also announced the takeover of the Children’s Eye Care of North Texas (CECNT), a private pediatric ophthalmology practice in Plano, TX.
Although the transaction details of both the acquisitions were not disclosed, the takeovers were settled in cash and are expected to prove accretive to earnings immediately.
Northwest Anesthesia’s clinical care team consists of 128 full-time equivalent clinicians (37 full-time equivalent anesthesiologists and 91 full-time equivalent anesthetists) who provide services to seven Allina Health facilities. Notably, this is the first Minnesota-based practice to join MEDNAX.
On the other hand, CECNT comprises one physician and three full-time administrative personnel that provide services in 15 hospital and clinic locations throughout North Texas. The acquisition will help the company expand its maternal-fetal, newborn nursery and pediatric subspecialty services in the North Texas market.
Buyout Synergies
MEDNAX continues to thrive on its strategy of executing frequent acquisitions. In the first quarter of 2016, the company completed four acquisitions. Management noted that 85% of the quarter’s revenue growth (18% year over year) came from recent acquisitions.
The vRad takeover (May 2015) contributed less than half of this growth, as did practice acquisitions; while Alegis accounted for the remainder. Notably, vRad is a leading provider of teleradiology services to over 2,100 healthcare companies across all 50 states, the District of Columbia and Puerto Rico.
To date, in 2016, MEDNAX completed acquisitions of private physician groups like West End Anesthesia Group, Professional Anesthesia Associates and Lighthouse Anesthesia, based in Virginia, Tennessee and Georgia, respectively. The acquisitions will help MEDNAX better serve hospital customers in the regions.
MEDNAX also bought Pediatric Ear, Nose and Throat Institute of South Texas (PENT) in San Antonio, TX. The acquisition expands MEDNAX’s service offerings in the pediatric ear, nose and throat field as it provides every kind of ear, nose and throat medical, audiology and surgical services, including ear tubes, tonsillectomies and sinus surgery.
Early last month, MedData a division of MEDNAX, acquired Duet Health, which provides patient engagement software and mHealth solutions.
We believe MEDNAX will continue to pursue acquisitions of expert private physician groups in different specialties like neonatology, anesthesiology, maternal-fetal medicine and pediatric cardiology specialties. This will drive its results over the long haul.
Zacks Rank & Key Picks
MEDNAX has a Zacks Rank #3 (Hold).
Better-ranked stocks in the same space include AMN Healthcare Services , Adeptus Health (ADPT - Free Report) and VCA Inc (WOOF - Free Report) . While AMN Healthcare sports a Zacks Rank #1 (Strong Buy), Adeptus and VCA carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>