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AMN Healthcare's Latest Buyout Ramps Up Employee Count

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AMN Healthcare Services Inc.AHS continues to forge ahead with its buyout plans which have in turn ramped up its employee base. The company recently announced the acquisition of Irvine, CA-based The First String Healthcare - a leading provider of nursing staff.

The acquisition strengthens AMN Healthcare's temporary and permanent nursing manpower, which will help the company to address growing client needs. The takeover also expands AMN Healthcare's footprint by adding more than 250 of the nation's top hospitals from The First String Healthcare's client base.

AMN Healthcare expended $6.5 million in cash for The First String Healthcare and is due to shell out another $4.5 million based on future performance. We believe that AMN Healthcare will continue to pursue such strategic acquisitions that will not only help it to expand its employee count but also eliminate competition.

Over the last few years, acquisitions have been a key growth catalyst for AMN Healthcare. The company bought ShiftWise in 2013 and Avantas in 2014. In early 2015, the company acquired nurse and allied healthcare staffing firm Onward Healthcare (OH), national locum tenens provider Locum Leaders and SaaS-based vendor management system for healthcare facilities provider Medefis.

The acquisitions of OH and Locum Leaders significantly enhanced AMN Healthcare's recruitment capacity and in turn candidate supply. Synergies from these takeovers have driven considerable top-line growth. In the first half of 2015, revenues surged 38% year over year to $677.7 million. OH and Avantas contributed an additional $71.7 million.

Moreover, we believe that these acquisitions will help AMN Healthcare improve traction in the fast growing U.S. temporary staffing market, which is forecasted to value $12 billion by 2016.

Meanwhile, we believe that AMN Healthcare will continue to benefit from the stable employment scenario in the U.S. driven by higher demand for clinicians and nurses. Further, the aging demography and higher number of newly-insured patients (due to Obamacare) are significant positives.

Zacks Rank & Key Picks

AMN Healthcare sports a Zacks Rank #1 (Strong Buy). ICON Plc ICLR , INC Research INCR and Masimo MASI are other stocks in the broader medical sector that sport the same Zacks Rank as AMN Healthcare.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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