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MEDNAX (MD) Acquires Maternal-Fetal Practice in Florida

Share price of MEDNAX Inc MD edged up nearly 1% following the company’s announcement of the acquisition of a privately held physician group practice -- Maternal Fetal Medicine of Southwest Florida.

Notably, the buyout closely follows MEDNAX’ recent takeover of ‘Associated Anesthesiologists’ in Nevada, following the second-quarter earnings release.

The company disclosed that the latest acquisition has been executed entirely in cash and is expected to prove immediately accretive to earnings. However, all other terms of the deal have been kept under wraps.

Maternal Fetal Medicine currently employs a broad range of specialists who provide high-end services like perinatology and sonography. The practice has four physicians, 11 sonographers and 26 other clinical and administrative staff across four patient offices and six hospitals.

Buyout Synergies

This deal is likely to expand MEDNAX’s presence and help it fortify its market position in southwest Florida. Apart from pediatric and other multiple specialty services, the acquisition will allow the company to provide high-risk ‘ultrasound maternal-fetal’ and neonatal medicines to potential patients in the region.

A glimpse of the recent buyouts reveal that the company has successfully closed three acquisitions in the just-reported second quarter. Moreover, to date in 2016, the company has acquired ten physician practices, including Maternal-Fetal Practice in Florida.

Our Take

Taking the growing awareness in the neonatal, fetal and related ancillary markets into consideration, we believe the recent acquisition will help MEDNAX tap in on significant opportunities going ahead.

Notably, data from ‘Markets And Markets’ reveal that the global fetal (labor & delivery) and neonatal care equipment market is poised to grow at a CAGR of 6.5% to reach $8.61 billion by 2020. Meanwhile, the ultrasound market is also set for a strong growth with a CAGR of 5.5%, likely to be worth $6.86 billion by 2020.

Zacks Rank & Key Picks

Currently, MEDNAX has a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader medical sector include CryoLife Inc. CRY, Masimo Corporation MASI and NuVasive Inc. NUVA. Notably, all the three stocks sport a Zacks Rank #1 (Strong Buy).

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