Pacific Physician Services last week announced it will acquire Knoxville, Tenn.-based Team Health Group for about $41 million, calling the deal a "platform for growth in the Southeast."
The Redlands, Calif.-based prepaid healthcare services manager will issue some 3 million shares of its common stock, which traded at approximately $17 last week on the NASDAQ exchange, for all outstanding securities of Team Health. Physician groups
Pacific Physician Services also will assume Team Health's $11 million of debt.
Team Health manages physician practices in emergency and radiology departments at 42 hospitals in Alabama, Arkansas, Kentucky, Tennessee and Virginia.
Pacific Physician Services manages physicians and medical groups serving 300,000 HMO enrollees in Arizona, California, Nevada and North Carolina.
For the year ended July 31, 1994, Team Health reported operating revenues of $66 million, compared with revenues of $210 million for Pacific Physician Services in the same period.
"We anticipate that our experience in prepaid healthcare, combined with the management talent and strong reputation of (Team Health) in the Southeast market, will facilitate development of our medical group network. The merger will substantially expand our presence in the Southeast," said Gary Groves, M.D., Pacific Physician Services' president and chief executive officer.
Team Health President and CEO Lynn Massingale said about 5% of his company's revenues are from prepaid services, and he expects that to grow.
Team Health was created last year through the merger of Southeastern Emergency Physicians and three smaller physician contract management companies.