Transaction Enables Singular Focus on Pediatrix
and Obstetrix Medical Groups
MEDNAX, Inc. (NYSE: MD), the nation’s leading provider of
maternal-fetal, newborn and pediatric subspecialty care, today
announced a definitive agreement pursuant to which Radiology
Partners will acquire MEDNAX Radiology Solutions for $885 million
to create a leading provider of comprehensive radiology and
teleradiology services in the United States. MEDNAX previously
announced its intent to sell MEDNAX Radiology Solutions, and this
agreement follows substantive discussions and due diligence with
several parties before identifying Radiology Partners as the
strongest partner for MEDNAX’s radiology organization.
“This transaction will enable MEDNAX to return to our core
Pediatrix and Obstetrix medical groups,” said Mark S. Ordan, Chief
Executive Officer of MEDNAX. “We believe our dedication of
resources and focus on the clinical services our company provides
to women and children is best for all stakeholders. We believe this
transaction will also enable increased efficiency and a path for
solid growth. Finally, we are pleased that the anticipated proceeds
of this transaction, in addition to cash inflows we have already
received this quarter and additional operating cash flow expected
through the remainder of 2020, should significantly strengthen our
balance sheet and provide a strong financial foundation for future
growth.”
Founded in 2012, Radiology Partners is the leading
physician-owned, on-site radiology practice, partnering with
approximately 1,600 radiologists providing services to nearly 1,300
hospitals, clinics and imaging centers across 26 states. MEDNAX
Radiology Solutions, founded in 2015, is an integrated provider of
seamless on-the-ground and in-the-cloud radiology services,
delivering scale and value to hospitals, clinics, imaging centers
and referring physicians through the combination of highly
innovative physician groups and vRad, the nation’s leading
teleradiology organization. Upon the closing of this transaction,
the combined organization, operated under the Radiology Partners
name, will include over 2,400 radiology physicians who provide
services across all 50 states and the District of Columbia.
“We are excited to welcome so many outstanding radiologists and
physician leaders to our practice,” said Rich Whitney, Chief
Executive Officer of Radiology Partners. “We believe the benefits
of increased scale, paired with local practice autonomy and
physician leadership, will allow us to continue to advance patient
care, improve clinical value and ultimately transform radiology.
The addition of these leading practices, as well as the nation’s
premier tech-enabled teleradiology platform, presents an amazing
opportunity to accelerate our progress on this important
mission.”
“Radiology Partners has distinguished itself within the
radiology community as a mission-driven practice committed to
clinical innovation, outstanding service delivery, physician
leadership development and local practice decision-making, all of
which aligns with the values of our radiologists,” said Ricardo C.
Cury, M.D., FACR, Chief Medical Officer of MEDNAX Radiology
Solutions. “Combining our expertise, experience and infrastructure
will enable us to create new pathways for innovation that we can
bring to our patients and our clients. I could not be more excited
about the new home for our physicians and staff.”
Under the terms of the agreement, Radiology Partners will pay
total cash consideration at closing of $885 million, subject to
customary adjustments. MEDNAX does not anticipate that there will
be any material tax impact to these proceeds. As of September 1,
2020, MEDNAX had total debt of $1.75 billion, consisting solely of
its senior notes, and cash on hand of approximately $260 million,
resulting in net debt of approximately $1.49 billion, compared to
net debt of $1.62 billion at June 30, 2020.
The transaction is expected to close during the fourth quarter
of 2020, subject to customary closing conditions, including
regulatory review. Further details of the transaction can be found
in a Current Report on Form 8-K filed by MEDNAX today with the
Securities and Exchange Commission. Pending the closing of the
transaction, MEDNAX will report the operating results of MEDNAX
Radiology Solutions as discontinued operations.
Advisors
Barclays is serving as financial advisor and DLA Piper LLP (US)
is serving as legal counsel to MEDNAX. Goldman Sachs & Co. LLC
is serving as financial advisor and Kirkland & Ellis LLP is
serving as legal advisor to Radiology Partners.
ABOUT MEDNAX
MEDNAX, Inc. is a national health solutions partner comprised of
the nation’s leading providers of physician services. Physicians
and advanced practitioners practicing as part of MEDNAX are
reshaping the delivery of care within their specialties and
subspecialties, using evidence-based tools, continuous quality
initiatives, consulting services, clinical research and
telemedicine to enhance patient outcomes and provide high-quality,
cost-effective care. The Company was founded in 1979, and today,
through its affiliated professional corporations, MEDNAX provides
services through a network of more than 3,000 physicians in all 50
states and Puerto Rico. Additional information is available at
www.mednax.com.
ABOUT RADIOLOGY PARTNERS
Radiology Partners is the largest physician-led and
physician-owned radiology practice in the U.S., serving nearly
1,300 hospitals and other healthcare facilities across the nation.
As a physician-led practice, its mission is to transform radiology
by innovating across clinical value, service and economics, while
elevating the role of radiology and radiologists in healthcare.
Using a proven healthcare services model, Radiology Partners
provides consistent, high quality care to patients, while
delivering enhanced value to the hospitals, clinics, imaging
centers and referring physicians we serve. Learn more at
www.radpartners.com.
Forward Looking Statements
Certain statements and information in this press release may be
deemed to contain forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995, Section 27A
of the Securities Act of 1933, as amended (the “Securities Act”),
and Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements may include, but are not limited to,
statements relating to the Company’s objectives, plans and
strategies, and all statements, other than statements of historical
facts, that address activities, events or developments that we
intend, expect, project, believe or anticipate will or may occur in
the future. These statements are often characterized by terminology
such as “believe,” “hope,” “may,” “anticipate,” “should,” “intend,”
“plan,” “will,” “expect,” “estimate,” “project,” “positioned,”
“strategy” and similar expressions, and are based on assumptions
and assessments made by the Company’s management in light of their
experience and their perception of historical trends, current
conditions, expected future developments and other factors they
believe to be appropriate. Any forward-looking statements in this
press release are made as of the date hereof, and the Company
undertakes no duty to update or revise any such statements, whether
as a result of new information, future events or otherwise.
Forward-looking statements are not guarantees of future performance
and are subject to risks and uncertainties. Important factors that
could cause actual results, developments, and business decisions to
differ materially from forward-looking statements are described in
the Company’s most recent Annual Report on Form 10-K and its
Quarterly Reports on Form 10-Q, including the sections entitled
“Risk Factors”, as well the Company’s current reports on Form 8-K,
filed with the Securities and Exchange Commission, and include the
impact of the COVID-19 outbreak on the Company and its financial
condition and results of operations; the effects of economic
conditions on the Company’s business; the effects of the Affordable
Care Act and potential changes thereto or a repeal thereof; the
Company’s relationships with government-sponsored or funded
healthcare programs, including Medicare and Medicaid, and with
managed care organizations and commercial health insurance payors;
the Company’s ability to comply with the terms of its debt
financing arrangements; the impact of the divestiture of the
Company’s anesthesiology medical group; whether the Company will be
able to complete the divestiture of its radiology medical group and
the potential uses of proceeds thereof; the impact of management
transitions; the timing and contribution of future acquisitions;
the effects of share repurchases; and the effects of the Company’s
transformation initiatives, including its reorientation on, and
growth strategy for, its pediatrics and obstetrics business.
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version on businesswire.com: https://www.businesswire.com/news/home/20200910005449/en/
Charles Lynch Senior Vice President, Finance and Strategy
954-384-0175 ext. 5692 charles_lynch@mednax.com
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