MEDNAX Moves to Acquire Cardon

By Chris Lange Updated Jan 13, 6:52AM EST · Published Jun 13, 11:10AM EDT

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MEDNAX Moves to Acquire Cardon — © Thinkstock

MEDNAX Inc. (NYSE: MD) has announced that its MedData subsidiary will be acquiring one of the nation’s largest providers of integraded revenue cycle management services. Ultimately, MedData will buy out Cardon Outreach for a purchase consideration of roughly $400 million.

Note that this deal is subject to customary closing conditions and regulatory approvals.

The company expects to add an initial $0.14 per share in annualized earnings with this acquisition. MEDNAX 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.

Ultimately, the company believes that this transaction is yet another important step forward in the strategic development of its integrated management services capability. MEDNAX’s hospital partners are facing numerous challenges related to the dramatic expansion of Medicaid coverage across the country and the increasing financial responsibility placed on the shoulders of patients. The company is looking for this combination to provide an opportunity for significant future growth through cross-selling.

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Cardon Outreach was founded in 1996, and it provides services and technology solutions focused on helping hospitals and health care 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 hospitals and other health care facilities in 46 states.

Ann Barnes, president and CEO of MedData, commented:

Cardon Outreach is a clear market leader of revenue-cycle management services. 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.

Shares of MEDNAX were trading at $68.86 Monday morning, with a consensus analyst price target of $78.45 and a 52-week trading range of $61.40 to $86.09.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.