Sheridan, the Physician Services Division of Tennessee-based healthcare provider Amsurg Corp. AMSG, recently purchased Radiology Associates of Hollywood, P.A. (“RAH”) – a leading provider of radiology services in South Florida.
This acquisition is part of Sheridan’s effort to expand in radiology services business. We note that this division was formed at AmSurg post the company’s acquisition of Sheridan Healthcare in Jul 2014.
RAH comprises more than 50 sub-specialty trained radiologists in Hollywood, FL, who read around 800,000 studies annually. This broad spectrum of radiologic specialties includes diagnostic, interventional and oncology solutions to 12 hospitals and imaging facilities throughout Broward County. Over the past 40 years, RAH has been successfully providing services to the Memorial Healthcare System.
In order to strengthen its presence in the radiology services space, in January this year, Sheridan acquired Radisphere Radiology, a national radiology practice active in 25 states and employing over 100 radiologists who offer both onsite and teleradiology services. AmSurg believes that the geographic footprint of Radisphere will complement Sheridan’s existing service areas and will strengthen the company’s network of relationships with key hospitals.
Following the acquisition of Sheridan Healthcare, AmSurg has become a prominent player in the physician-centric surgical center and physician outsourcing business with a diversified, complementary business mix and a significantly enhanced growth profile. Apart from an increase in business at the Physician Services Division owing to new contract wins and acquisitions, the combined company is expected to improve integration of anesthesia and surgery in the ambulatory episode of care, expand relationships with health systems and payors, and increase new hospital/ASC joint ventures.
Given that the market for outsourced physician services is highly fragmented and predominantly served by small provider groups, AmSurg believes there is significant opportunity for further growth through new contract wins from smaller provider groups and through targeted acquisitions. We expect AmSurg to confidently proceed on its acquisition pipeline, supported by a strong cash position.
AmSurg currently carries a Zacks Rank #3 (Hold). Investors interested in the similar sector can, however, consider stocks like Almost Family Inc. AFAM, Chemed Corp. CHE and LHC Group, Inc. LHCG. All three stocks carry a Zacks Rank #1 (Strong Buy).
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