Healthcare Staffing Report: July 18, 2019

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AMN closes Advanced Medical acquisition

AMN Healthcare Services Inc. (NYSE: AHS), the largest US healthcare staffing provider, announced the completion of its acquisition of Advanced Medical Personnel Services Inc.

According to AMN, the base purchase price was $200 million with up to an additional $20 million to be paid if Advanced achieves certain financial results as of Dec. 31, 2019.

AMN first announced the deal in May.

Advanced places occupational therapists, physical therapists, speech language pathologists, and nurses in contract positions across multiple settings, including hospitals, schools, clinics, skilled nursing facilities and home health. It recently launched a platform that provides large school districts with onsite and telehealth therapists. 

Launched in 1989, Advanced is headquartered in Port Orange, Florida, with an additional office in Denver. It does business as Advanced Inc., which ranks No. 22 on Staffing Industry Analysts’ list of largest healthcare staffing firms in the US.

“Advanced brings a very talented team that will enable us to collectively serve our nursing and allied clients most effectively during the current and expected future strong demand environment,” said AMN Healthcare President and CEO Susan Salka. “We are also excited about the innovative approach Advanced has created to deliver therapy services in school settings to care for children during their critical development years.”

AMN stated the acquisition is expected to add approximately $5 million of revenue to AMN’s second-quarter 2019 results; it expects Advanced to contribute $70 million to $75 million in revenue and approximately $10 million adjusted EBITDA in the second half of 2019, with its fourth quarter revenue approximately 15% greater than in the third quarter due to the seasonality of Advanced’s school staffing business.

On a combined basis, AMN’s income tax rate for the second half of the year is expected to be 30% due to a higher tax rate for Advanced. Advanced will add about $250,000 to depreciation expenses in each of the third and fourth quarters.

To finance the acquisition, AMN used $51 million in capacity available under its existing secured revolving credit facility and amended its credit facility to obtain a new $150 million term-loan maturing in June 2024. 

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