Premier, a company that provides group purchasing and performance services to hospitals, reported strong growth in its first year as a public company.
The Charlotte, N.C.-based company reported pro forma results showing profits up 9% to $188.6 million and revenue up 14% to $869.2 million.
The company went public last year, making it one of two publicly traded group purchasing organizations along with Alpharetta, Ga.-based MedAssets.
Part of the strategy behind Premier’s IPO, completed in October last year, was to generate cash to fund acquisitions at a time when hospitals are evaluating their purchasing practices as they seek to cut the costs of medical supplies and services and improve the overall efficiency of the hospital supply chain.
Premier stuck to the plan, spending $42.6 million during its fiscal year to buy three companies: SymmedRx (physician-preference contract management); Meddius (data integration); and Memdata (capital equipment planning and analytics).
And the company has made two more deals since its fiscal 2014 ended June 30, including a $48.5 million acquisition announced Monday to acquire Aperek, a software-as-a-service supply chain services provider. That follows a $117 million acquisition of clinical surveillance software company TheraDoc announced a few weeks earlier.
Those deals put Premier’s total spending on acquisitions since June 2013 at about $208 million, and more are expected.
“We plan to continue deploying capital during fiscal 2015 in a disciplined manner, focusing on attractive areas that align with our business objectives,” Premier CEO Susan DeVore said in a statement.
For its supply chain services segment, which makes up nearly 75% of the company’s revenue, Premier reported a 14% increase in revenue to $636.8 million for the year, fueled by a small increase in net administrative fees. Revenue for the performance services business rose 13% to $232.4 million.
Net administrative fees rose 2% to $423.5 million in 2014. GPOs earn net administrative fees of 1% to 3% based on supplier contracts they negotiate on behalf of hospital members.
Premier said it expects net revenue to increase between 11% and 14% in 2015 on a pro-forma basis.
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