Brecksville, Ohio (June 13, 2016) – MedData, a MEDNAX (NYSE: MD) company and a leading national provider of technology-enabled healthcare services, today announced the acquisition of Cardon Outreach, LLC, one of the nation’s largest providers of integrated revenue cycle management services.
Founded in 1996, Cardon Outreach provides services and technology solutions focused on helping hospitals and healthcare systems lower costs, reduce operating and capital expenses, recover revenue, and increase productivity. The company provides specialized eligibility assistance, accounts receivable recovery services, third party liability, workers’ compensation, social security disability, denials management and appeals, and patient financing/early out programs to more than 800 healthcare providers and hospitals in 46 states.
“Cardon Outreach is a clear market leader of revenue-cycle management services,” said Ann Barnes, president and chief executive officer of MedData. “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.”
Based in The Woodlands, Texas, Cardon Outreach is currently expected to generate 2016 annualized earnings before interest, taxes, depreciation and amortization (EBITDA), a non-GAAP measure, of $36 million.
“This transaction is yet another important step forward in the strategic development of our integrated management services capability,” said Roger J. Medel, M.D., chief executive officer of MEDNAX. “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.”
After the deal closes, the combined companies will have nearly 2,000 employees. Each entity will retain its brand and all current facilities will remain in place as they are today.
“Joining with MedData gives us the opportunity to deliver even more value to our hospital partners who trust us to manage their revenue cycle,” said Glen Laschober, chief executive officer of Cardon Outreach. “We value what is important to our clients…their patients. And we look forward to working together to continue building long lasting relationships.”
The transaction is subject to customary closing conditions, including regulatory approvals and is expected to close within the next 30 days.
The purchase consideration for the transaction was $400 million. The acquisition is expected to be accretive to GAAP earnings. Based on Cardon Outreach’s current results, MEDNAX anticipates that the acquisition will add an initial $0.06 in annualized diluted earnings per share, and $0.14 in annualized adjusted earnings per share. The Company anticipates that this contribution will increase in the foreseeable future, based on expected percentage growth in organic revenue at Cardon in the low double digits.
MedData, a MEDNAX (NYSE: MD) company, is a technology-enabled services organization that improves financial outcomes for hospitals by enhancing the patient experience and expanding their access to healthcare. The MedData managed services platform includes a range of patient access and communications, revenue cycle management, and consulting and analytics solutions.
For more than 35 years, the company has been providing innovative services and technologies to the medical community and serving millions of patients across numerous medical specialties. MedData currently serves more than 5,000 physicians at a growing network of 1,000+ facilities nationwide from its headquarters in Brecksville, Ohio and 7 regional offices across the U.S. To learn more about MedData’s patient-focused solutions platform, please visit MedData.
About Cardon Outreach
Cardon Outreach is a leading, national provider of revenue cycle management services with over 20 years of progressive experience. The company serves more than 800 healthcare providers and hospitals through its integrated service lines, single technology platform, and patient-centered advocacy. Clients of Cardon Outreach consistently realize increased net patient revenue and reduced bad debt, while their patients experience improved access to healthcare. To learn more about how Cardon Outreach partners with providers on Eligibility, Early Out, Third Party Liability, Social Security Disability, Workers’ Compensation and Denials Management, please visit Cardon Outreach.