MedData, a company providing technology-enabled health care services owned by Florida-based Mednax, is acquiring Cardon Outreach.
Cardon Outreach provides services and technology to help hospitals and health care systems lower costs, reduce operating and capital expenses, recover revenue, and increase productivity, according to a news release.
“Cardon Outreach is a clear market leader of revenue-cycle management services,” Ann Barnes, president and CEO of Brecksville, Ohio-based MedData said in a statement. “As reimbursement models evolve to reflect a more value-based, consumer friendly healthcare system, so do our clients' needs for innovative revenue cycle management solutions. Our combined capabilities will enhance MedData's ability to provide superior patient-focused services with an even richer set of offerings to reduce costs and optimize clients' operations."
Woodlands, Texas-based Cardon Outreach, which provides programs and services to more than 800 hospitals and health care facilities in 46 states, is currently expected to generate 2016 annualized earnings before interest, taxes, depreciation and amortization (EBITDA), a non-GAAP measure, of $36 million, according to the release.
“This transaction is yet another important step forward in the strategic development of our integrated management services capability,” Dr. Roger J. Medel, CEO of MEDNAX, said in a statement. “Our hospital partners face numerous challenges related to the dramatic expansion of Medicaid coverage across the country and the increasing financial responsibility placed on the shoulders of patients. We believe that the combination of MedData and Cardon Outreach, complemented by our own hospital relationships, can provide us with the opportunity for significant future growth through cross-selling of our diverse solutions.”
Once the deal closes, which is expected to happen within the next 30 days, the combined companies will have almost 2,000 employees. The brands and current facilities of each will remain the same as they are today.
The purchase consideration for the transaction was $400 million, according to the release.
“Joining with MedData gives us the opportunity to deliver even more value to our hospital partners who trust us to manage their revenue cycle,” Glen Laschober, Cardon Outreach CEO, said in a statement. “We value what is important to our clients…their patients. And we look forward to working together to continue building long lasting relationships.”
Based on Cardon Outreach's current results, Mednax expects the acquisition to add an initial $0.06 in annualized diluted earnings per share, and $0.14 in annualized adjusted earnings per share, according to the release. This is anticipated to increase in the future.
"" originally appeared in Crain's Cleveland Business.