MEDNAX IncMD recently announced acquisition of Pediatric Cardiology Associates (PC), which is a private physician group practice in Fairfax, VA. Pediatric Cardiology employs six physicians and four sonographers and serves 10 offices and eight hospitals in Northern Virginia and Maryland.
Moreover, Pediatric Cardiology provides full cardiovascular care for fetuses, infants and children as well as congenital heart patients. Their services include echocardiography, cardiac catheterizations, stress tests and event monitoring. The buyout is expected to be accretive to earnings on an immediate basis.
This acquisition will help MEDNAX better penetrate the markets of Northern Virginia and Maryland. Notably, this is the eighth physician group practice acquisition by the company in 2016.
Over the past six months, MEDNAX has been actively pursuing acquisitions, which is driving revenues substantially. The company noted that 85% of its first-quarter 2016 revenue growth (18% year over year) came from the recent buyouts. The vRad takeover (May 2015) contributed less than half of this growth, as did practice acquisitions; while Alegis accounted for the remainder.
MEDNAX INC Revenue (TTM)
Most recently, MedData, a division of MEDNAX, took over Revenue Cycle Management (RCM) provider Cardon Outreach for $400 million. This acquisition is expected to drive a significant upside in revenues for the company this year.
Last month, MEDNAX bought Westchester Anesthesiologists, a private physician group practice in White Plains, NY. It also completed the takeover of private physician practices like West End Anesthesia Group, Professional Anesthesia Associates and Lighthouse Anesthesia in Virginia, Tennessee and Georgia, respectively.
Although financial leverage is a concern for MEDNAX, we believe these acquisitions will continue to drive earnings in the near term.
Zacks Rank and Other Key Picks
MEDNAX has a Zacks Rank #2 (Buy).
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