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MEDNAX Announces Agreement to Sell MEDNAX Radiology Solutions to Radiology Partners
[link=https://www.businesswire.com/news/home/20200910005449/en/MEDNAX-Announces-Agreement-Sell-MEDNAX-Radiology-Solutions]https://www.businesswire….AX-Radiology-Solutions[/link]
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34 Replies
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I wonder how the docs doing the work for vRad will be treated in all of this…similar to a RP telerad? Second-class citizen?
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wowowowowowo
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I guess money does grow on trees after all.
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Hide yo kids, Hide yo wife, They coming.
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Lets close down one of these two threads- redundent ot the one posted by TexasRads. Bad enough we have to read about it once let alone twice
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Agree to combine 2 threads.
In essence: the big just got bigger.
RP imprint is now more powerful and will perhaps (likely) be more aggressive.-
Basically they have a near monopoly in Houston private market now. Granted not the most desirable city but still
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Not really. Methodist is second largest hospital system and still private group.
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I heard Methodist is looking to sell out and had talked to RP, Does anyone have more info?
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The enemy is at the gates! Almost every small to moderate sized private practice has just let RP in through the back door.
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Anyone in a Mednax group want to give an update?
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but they now have to be short on cash.. no way they are buying any more major practices right now
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Quote from TurboEcho
but they now have to be short on cash.. no way they are buying any more major practices right now
Time to raise more. Don’t worry. They now have 2000 workhorses to pay it back with interest.
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One article said that they paid with cash? Yikes
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This comes as no surprise that the only group stupid enough to put good money after bad in this deal is a group that thinks there is still money in the game. The ‘valuation” must have looked very good to them. Will it keep the Ponzi scheme going for a while longer?
Agree that this ties up cash and will likely decrease the pressure on smaller groups.
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Who’s gonna buy RP out? LOL.
Amazon?
IBM?
Putin? -
Its the eighties all over again.
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I always wondered who could afford to buy out Andrew Carnegie from US Steel in the past…only one man…JP Morgan who = banks, essentially.
These days it might be pension funds, sovereign funds, AND still banks.
Gotta love ‘merica 😉
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If RP owns VRC, and VRC has access to private groups and all their PACS systems to review old films, and all their coverage needs, # of rads, etc, and can access their software links, billing operations, management etc. and much more via the VRC contract negotiation process…..doesn’t this give RP a huge negotiating advantage to buy practices and take them over? and doesn’t this give administrators a big club to hit private groups with? that is, ‘well, I just got a call from RP and their offer is pretty enticing compared to your salary requests.’
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Quote from CoronaRad
Basically they have a near monopoly in Houston private market now. Granted not the most desirable city but still
Every job listing there was RP or Synergy. Now it will all be RP.
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Reminds me of around a decade ago (2010?), when vRad was formed by the merging of the two biggest telerad entities in the field. I seem to recall everyone expected the massive juggernaut to swallow everything and everyone.
Since then, vR got bought and sold multiple times. This is just the latest bigger fish.
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Bold move RP!
I wouldn’t have the courage to increase leverage in such uncertain times. What if reimbursement gets cut 10% over the next couple years? Guess they are going all in. Hopefully it works out for everyone, as if it doesn’t there could be some real misfortune ahead.
This is going to put their debt/EBITDA well over 10 !?!
In March it was estimated that they had $525 million of cash after drawing on a $300 M revolver. Now they are going to make a $885 M purchase of a company that was already highly leveraged. Their accountants are going to need a raise… it’s tricky to build a house of cards this high.-
They are trying to pump up the balance sheets and then manipulate (ie. Lie) about the long term profitability of the company while hoping the ‘greater fool’ theory holds true and some PE idiot firm buys them out.. question is…who’s it gonna be?
Could also just go public too but that would be a crapstorm…
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Curious to know what will happen to the promised payouts from Mednax to those who sold out and have not fully vested yet?
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Its not like theyre going to get sued for anti-trust violations or have any competition from private practice radiologists. Might as well dominate the entire market since we let them.
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[link]https://www.marketwatch.com/investing/stock/md[/link]
Mednax stock never made
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[link=https://www.marketwatch.com/story/mednax-to-sell-radiology-business-to-doctor-owned-radiology-partners-for-885-million-in-cash-2020-09-10?mod=mw_quote_news]https://www.marketwatch.c…9-10?mod=mw_quote_news[/link]
“Mednax Inc. [link=https://www.marketwatch.com/investing/stock/MD?mod=MW_story_quote]MD, -4.13%[/link] said Thursday it has reached an agreement to sell its radiology business to physician-owned Radiology Partners for $885 million in cash.” …. thats a lie if I ever heard one…-
All of these corporates are going to try to use AI to decimate the Dx workforce and flip it to a PE, thats the obvious strategy
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Quote from DOCDAWG
They are trying to pump up the balance sheets and then manipulate (ie. Lie) about the long term profitability of the company while hoping the ‘greater fool’ theory holds true and some PE idiot firm buys them out.. question is…who’s it gonna be?
Could also just go public too but that would be a crapstorm…
Well said. In business it is always like “how can I unload this $hit for a higher price for a bigger idiot than me?!” LOL
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MEDNAX stock not that long ago was $100 per share, my guess is RP will go public eventually.
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My recommendation is to diversify your portfolio and buy Radpartners stock once it goes public. That way you can’t lose no matter what happens[:)]
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A few comments.
I maintain some healthy skepticism, and make no comment on the long-term effects on our field in general. However, I believe that the one specialty model of RP will be to the benefit of current vRad radiologists. Corporate multi-specialty groups, like MedNax and Envision, just have not delivered value to patients or shareholders. Radiology is a unique field with very specific managerial and IT needs. Far too often, I see MSGs and hospitals ignore these needs to their own detriment because they are unable to focus, just too many competing priorities. Time will tell.
I for one would like to see an IPO exit. I would love to have the transparency related to public scrutiny of the financials. With vRad going private, we are going to miss out on a lot of the details currently available and some of the richness of financial/business analysis. I am still looking forward to greater details (beyond RB article and press release) of deal structure, use of debt versus equity. That said, staying private gives them a lot more flexibility, less scrutiny, and potential for a longer time horizon, good things for their radiologists.
The most interesting considerations for me at this time are 1) Big data play and 2) Managing current vRad relationships post-merger. The big data play was highlighted in the RB article–large data sets, multiple vendor, protocols, current AI partnerships, and a wealth of operational and billing data. Will this merger enhance their ability to create value? The management of vRads current relationships will also be interesting. The deal will create instant increased touch points for RP with many new healthsystems and radiology practices, including AMCs. It will be a double edged sword that either creats significant organic and inorganic growth opportunities or spooks clientele. Their ability to deliver operationally and digest this acquisition will be key to their reputation and long-term prospects.
I also suspect that their growth from larger practice acquisition may slow in the short-term. The CEO pretty much suggested that further growth is an intermediate term goal. But, there is 1.5 Trillion in uncommitted PE capital out there, so I won’t be betting the family farm on that statement.-
@NYC- their goals for AI are lofty, but they will have access to a much larger data set, now.
My question is– what happens if they don’t reach profitability and interest rates start to go up? The radiologists there also re-invest into the company itself- do they get their money back upon bankruptcy?
I also wonder what we on this board are missing. This company is able to acquire more practices, hire more radiologists and keep growing. Are we the idiots here?
I’ve tried to ask the couple people I know who like it there. One believes in their growth potential and that it would grow his reinvested profits. The other (who is more technically business savvy) is more tight lipped about the thing.
… here I thought the pandemic stress would take down these companies. Contrarily, it’s made them stronger.-
The AI stuff is gonna be interesting to watch, but neither RP nor vRad have anything special or proprietary that I covet…. Yet…
IDK either.
Debt is senior to equity. The bond holders and banks are senior to any shareholders.
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