Pediatrix Medical Group, a neonatal and perinatal PPM based in Fort Lauderdale, Fla., disclosed Thursday that it received a subpoena from the Federal Trade Commission regarding the company's 2001 acquisition of former rival Magella Healthcare Corp.
Pediatrix officials say the FTC issued the subpoena late Wednesday. The FTC has been investigating Pediatrix since last June over whether its 2001 purchase of Magella was anticompetitive. The $190 million deal gave Pediatrix about one-sixth of the national market for neonatal intensive care patients.
Company officials were not immediately available for comment, but in a written statement issued Thursday, Pediatrix says, "Pediatrix intends to continue to cooperate fully with the FTC, but at this time cannot predict whether the investigation will have a material effect on its business, financial condition or results of operations."
The news did have an immediate impact on its stock price, as traders bid Pediatrix shares down nearly 17% by midday Thursday, to $28.25. The issue closed at $34 Wednesday on the New York Stock Exchange.
The disclosure of the subpoena coincided with Pediatrix releasing its 2002 financial results. Net income for the year was $68.8 million, more than double 2001 earnings of $30.4 million.
Net revenue from patient services totaled $465.5 million, 31.3% above the previous year's $354.6 million.