Navigant Consulting Inc.
) announced the acquisition of Cymetrix Corporation, an
Irvine-based revenue cycle management firm specializing in
providing outsourcing services to hospital healthcare networks.
Per the agreement, Navigant paid around $75 million in cash to
acquire 100% of Cymetrix's stock. Navigant said it could pay
additional milestone payments of up to $25 million, based on the
acquiree's post-closing performance with respect to certain
Cymetrix manages revenue cycles and codes medical records, and is
expected to add significant depth to Navigant's subsidiary
Alleviant, LLC, which presently provides physician revenue cycle
outsourcing services. The new entity, Navigant Healthcare Cymetrix,
is well-poised to become a leading provider of end-to-end revenue
cycle management services.
The deal is synchronized with Navigant's strategic plans of
incorporating data analytics, technology-enabled solutions and
operations outsourcing in its business portfolio. The two
companies' adjacent and complementary capabilities will enable them
to provide a complete range of solutions to clients, from strategy
and advisory services to execution.
With a client base of over 200 hospitals and health networks
nationwide, Cymetrix will add new, recurring and more predictable
revenue streams to Navigant and thus act as a catalyst for driving
revenue growth. The additional clientele will create new demand for
Navigant's resources, solutions and delivery capabilities.
A fortnight ago, Navigant reported its first-quarter 2014 results,
with its continuing earnings of 21 cents per share, declining about
19% year over year and missing the Zacks Consensus estimate by a
Total revenue was down 5.6% year over year to $197.7 million while
revenues before reimbursements (RBR) decreased 4.4% to $175.1
million. Total reported revenue, however, exceeded the Zacks
Consensus Estimate of $188 million.
Taking into account the expected impact of the present acquisition,
Navigant updated its 2014 guidance. The integration of Cymetrix is
expected to add $37 - $41 million to RBR in 2014, taking Navigant's
expected RBR to a range of $772 − $816 million. Total revenues for
2014 are anticipated to be in the range of $848 and $892 million,
including about $38 - $42 million from Cymetrix.
Adjusted earnings per share for 2014 are likely to lie between
$0.94 and $1.06, with a dilution of $0.07 to $0.09 per share
associated with the Cymetrix buyout.
Navigant currently holds a Zacks Rank #4 (Sell). Some better-ranked
stocks in the Consulting industry include
Huron Consulting Group Inc.
NV5 Holdings, Inc.
). Each of these stocks 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
CORELOGIC INC (CLGX): Free Stock Analysis
HURON CONSLT GP (HURN): Free Stock Analysis
NAVIGANT CONSLT (NCI): Free Stock Analysis
NV5 HOLDING INC (NVEE): Get Free Report
To read this article on Zacks.com click here.