AMN to Acquire MHA Group of Newport Beach
Posted on: Thursday, 6 October 2005, 09:00 CDT
By Sarah Skidmore, The San Diego Union-Tribune
Oct. 6--AMN Healthcare said yesterday that it plans to enter the physician-staffing business by acquiring The MHA Group of Newport Beach for $160 million.
The companies said the combination will create a business of size and scope that does not currently exist in the growing health-staffing market. It is the first foray for San Diego-based AMN beyond its dominant position in the nurse-staffing industry.
MHA spokesman Phillip Miller said the deal makes sense because the companies provide complementary services to the same customers.
"We realized the health-care-staffing industry is evolving," Miller said.
"Because of the demand we just see the market moving toward a direct, one-stop entity."
AMN executives will hold a conference call today to discuss the acquisition.
The deal calls for AMN to buy privately held MHA for $160 million in cash and stock and to pay an additional $35 million to $38 million if MHA meets certain financial goals.
Combined, the companies estimate that their annual revenue will reach $889 million for the twelve months ending June 30. Last year, AMN reported revenue of $629 million.
"We believe the combined value, breadth and depth of services that we can offer to our clients is unparalleled within the industry today," Susan Nowakowski, president and chief executive officer of AMN, said in a statement.
AMN specializes in sending nurses around the country to fill staffing voids, a situation worsened by a shortage of nurses. MHA provides temporary and permanent placement for physicians, such as radiologists and ambulatory care physicians that are in high demand.
Tobey Sommer, an analyst at SunTrust Robinson Humphrey, said the acquisition is a logical merger of two financially healthy companies.
"We think that the health-care-staffing market is picking up now," Sommer said. "It makes sense when things are getting a little better that you'd look around and see who you can acquire and grow with."
There are no plans to consolidate Newport Beach-based MHA or its nearly 800 employees to San Diego, according to MHA. The company, which was founded by James Merritt and Joseph Hawkins, will continue with its current management as well.
The transaction is subject to regulatory approval but is expected to be completed in the fourth quarter of this year.
AMN shares fell 62 cents to close at $14.82 before the announcement but rose 26 cents in after-hours trading.
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AHS,
Source: The San Diego Union-Tribune
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