In a bid to fortify in anesthesia specialty services, this time in Atlanta and the rest of Georgia, Sheridan – the Physician Services Division of Tennessee-based healthcare provider AmSurg Corp. AMSG – has taken over Northside Anesthesiology Consultants, LLC (NAC). However, the financial terms of the transaction have been kept under wraps.
NAC, with 60 physicians, 125 anesthetists, as well as other clinical and administrative personnel, is the sole provider of anesthesiology for Northside Hospital Healthcare System that has three acute care hospitals and 24 associated sites in the greater Atlanta market.
According to both the companies, the combined force will advance clinical excellence and complement each other’s expertise. While Sheridan will provide NAC with vital delivery platform components, expertise and resources, NAC will extend high quality care thereby expanding AmSurg’s presence in the greater Atlanta market.
This buyout is in line with AmSurg’s investment strategy adopted by management to capitalize on the significant acquisition opportunities in the rapidly expanding physician services space, with particular focus on anesthesia services.
Currently, the anesthesiology market is worth $19 billion, which is expected to ascend with the estimated rise in demand for anesthesia services. Meanwhile, AmSurg has been striving to capture a larger share of this market in order to ride the growth curve.
With this in mind, in Nov 2015, the company acquired Valley Anesthesiology & Pain Consultants, to expand anesthesiology services business and strengthen its presence in Phoenix, AR. Prior to that, AmSurg targeted Florida with the acquisition of St. Augustine-based Coastal Anesthesiology Consultants, P.A. in July and Daytona Beach-based Halifax Anesthesiology Associates, P.A., in April.
In this context, we encouragingly note that, the implementation of the Affordable Care Act, aging demographic trends in the U.S. and an increased insured population base should encourage a rise in surgery volumes. This will naturally enhance demand for emergency medical specialty services like anesthesia.
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.
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 progress on its acquisition pipeline, supported by a strong cash position.
Zacks Rank
AmSurg currently carries a Zacks Rank #2 (Buy). Some other favorably-ranked medical stocks are Foundation Healthcare, Inc. FDNH, LHC Group, Inc. LHCG and PharMerica Corporation PMC. All the three stocks sport a Zacks Rank #1 (Strong Buy).
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