Mednax, an investor-owned medical group and staffing company, closed deals totaling $850 million last year, fueling the company's rapid revenue growth in the final months of 2015.
Recent deals included seven anesthesiology practices and teleradiology company Virtual Radiologic Corp., which Mednax acquired for $500 million last May, allowing it an entry into the telehealth sector.
The deals contribute largely to the Sunrise, Fla.-based company's 14% increase in fourth-quarter net revenue to $741.7 million from $650.5 million, Mednax Chief Financial Officer Vivian Lopez-Blanco said during a conference call to announce the quarter's results. The company's net income for the quarter was $92.7 million compared with $88.4 million the prior year.
That buying binge is not yet over for the company—it's got its eye on additional operations in neonatal, maternal and pediatric specialties.
The company last year sought to increase its capacity to borrow to finance future deals, the company's CEO, Dr. Roger Medel, said. Mednaz borrowed an additional $750 million in December and now has access to $1.3 billion in debt to make acquisitions, he said. The company has entered into several letters of intent.
“We have plenty of financial power to continue to execute our strategy,” Medel said.
Anesthesiology will remain a target for the company, which has acquired 21 anesthesiology practices in the past three years. “We will continue to be one of the most active acquirers in this specialty,” he said.
Last year's deal on Virtual Radiology may also lead to other activity from radiology practices that have since approached Mednax, said Medel. Teleradiology could benefit from practices seeking to add subspecialties or address attrition as partners retire. The company has also expanded its services into revenue-cycle management with the 2014 acquisition of MedData.
Market upheaval may slow dealmaking, however. Some sellers may hold off with the hope that they can get a better deal by waiting out the turmoil, Medel said.
Mednax ended 2015 with net income of $336.3 million on revenue of $2.78 billion. That's compared with net income of $317.3 million on revenue of $2.44 billion last year.
