Huron Consulting Group expanded its hospital and health system practice at least fourfold with its $65 million
cash deal to buy healthcare consultant Wellspring Partners.
The acquisition, announced last week, adds Wellsprings 65 consultants and 2006 revenue of roughly $55 million to Hurons smaller healthcare group, which focused on revenue-cycle management for academic medical centers and generated revenue around $8 million to $10 million last year, said Gary Burge, Hurons chief financial officer and treasurer. Chicago-based Huron is a legal, financial and operations consultant. In addition to its healthcare practice, Huron has done bankruptcy work in the hospital sector, Burge said.
Huron doesnt disclose its number of consultants by practice, but it employs
810 consultants overall. For the nine months ended Sept. 30, 2006, Huron reported net income of $18.7 million off revenue of
U.S. Securities and Exchange Commission filings show.
David Shade, Wellsprings chief executive officer, principal and co-owner, will lead the combined healthcare consulting practice. Wellsprings remaining co-owners and principals have been named Huron managing directors. They are: Laurence Abramson, Joseph Alfirevic, Stephen Furry, Janice James, Ramona Lacy, Gordon Mountford, Manfred Steiner, John Tiscornia and George Whetsell.
The Wellspring deal was one of two Huron unveiled last week, and the largest of the publicly traded companys seven acquisitions since its formation in 2002, Burge said.
The company is seeking to gain a greater foothold in the industry, which Hurons executives consider a growth market, he said. In May 2005, Huron paid $14 million to $17 million in cash and $3 million in promissory notes to acquire consulting firm Speltz & Weis, with an additional amount to be paid if certain performance targets were met. The purchase followed some quick turnover in its then fledgling healthcare practice.
Huron isnt the only one looking to grow. High capital demands, evolving technology, changing reimbursement from Medicare and Medicaid and heavy regulation in healthcare have made the industry a strong sector for consulting, spurring mergers and acquisitions in recent years (Aug. 19, 2005, p. 6).
Huron also announced a $30 million deal to acquire turnaround and bankruptcy firm Glass & Associates, New York, Jan. 4. In conjunction with the deals, Huron amended a credit agreement to boost its borrowing capacity to $130 million from $75 million.
Wellsprings breadth and its work with U.S. community hospitals will expand Hurons geographic reach and its healthcare consulting services, Burge said. The acquisition expands Hurons services into supply-chain, strategic sourcing, management, information technology and valuation healthcare consulting. He said the additional services fit into Hurons growth strategy.