Healthcare Staffing Report: April 12, 2018

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AMN buys MedPartners for $195 million, and acquires two other firms

AMN Healthcare Services Inc. (NYSE: AMN) acquired MedPartners for $195 million, with up to an additional $20 million based on future financial performance. San Diego, Calif.-based AMN, which ranks as the largest US healthcare staffing firm, also announced it acquired two related healthcare staffing brands in the Northeast: Phillips DiPisa and Leaders for Today.

Tampa, Fla.-based MedPartners provides health information management and locum tenens staffing. It was a division of P2P Staffing Corp., a professional staffing company that also owns IT staffing business TekPartners. MedPartners generated 2017 revenue of approximately $125 million.

TekPartners/MedPartners ranks No. 18 on Staffing Industry Analysts’ list of largest healthcare staffing firms in and No. 5 on the list largest allied healthcare staffing firms in the US.

“With the acquisition of MedPartners, we can deliver a full range of mid-revenue cycle solutions that include case management, clinical documentation improvement (CDI), medical coding and registry services to our clients and healthcare professionals,” AMN President and CEO Susan Salka said. “The combination of Peak Health Solutions and MedPartners positions AMN Healthcare as the leading provider of mid-revenue cycle workforce solutions.”

In a separate transaction, AMN Healthcare acquired Phillips DiPisa and Leaders for Today, firms based in the Boston area, for a purchase price of $30 million, with potential for an additional $7 million based on future financial performance. The combined companies generated approximately $23 million in 2017 revenue. Phillips DiPisa is a nationwide executive retained search firm with branch offices in Atlanta, Chicago, Los Angeles and Philadelphia. Leaders for Today provides interim and permanent leadership workforce solutions.

“Healthcare organizations are looking for strong, experienced leaders to guide them through this period of unprecedented change,” Salka said. “The addition of Phillips DiPisa and Leaders for Today will expand our leadership placement services for the C-suite, meeting a critical need for healthcare executive teams and their boards as they navigate consolidation and develop ways to optimize their workforce and deliver high-quality care.”

The three deals suggest the market leader in healthcare staffing is investing in expanding its scale and scope of operations, according to Marina Karp, healthcare research analyst at Staffing Industry Analysts. “The acquisition of MedPartners expands AMN’s back-office workforce solutions and the leadership development deals suggest AMN’s interest in interim management — in addition to recruiting and placement,” Karp said.

AMN Healthcare funded the MedPartners acquisition through its revolving credit facility and the Phillips DiPisa/Leaders for Today deal out of cash on hand. MedPartners will enable AMN to realize tax benefits having an estimated net present value of approximately $25 million, while the Phillips DiPisa/Leaders for Today deal will provide tax benefits with an estimated net present value of approximately $4 million. The three firms will be included in the company’s “other workforce solutions” segment for financial reporting purposes.

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