AMN Healthcare Completes $195 Million in Acquisitions

An industry giant completes two new deals, acquiring revenue cycle management services firm MedPartners and leadership solutions providers Phillips DiPisa and Leaders for Today. Here’s the latest M&A news to hit the recruiting sector.
AMN Healthcare Completes $195 Million in Acquisitions

April 16, 2018 – As demand for talent remains strong, healthcare companies continue to consolidate. But it is more than hospitals that are in the market for acquisitions.

Service providers, too, are playing their part in transforming the sector.

AMN Healthcare Services, a provider of healthcare workforce solutions and staffing services, has completed two acquisitions: MedPartners, a national mid-revenue cycle firm, and two related brands in healthcare leadership solutions: executive search firm Phillips DiPisa and Leaders For Today. The acquisitions total $195 million, according to AMN.

The overall transaction is structured to allow AMN to realize tax benefits having an estimated net present value of about $25 million. The acquisitions were funded through the company’s revolving credit facility.

“As the leading healthcare workforce provider, we understand the growing need for healthcare facilities to optimize revenue to provide a more effective, quality patient care experience,” said Susan Salka, president and CEO of AMN Healthcare. “With the acquisition of MedPartners, we can deliver a full range of mid-revenue cycle solutions that include case management, clinical documentation improvement, medical coding and registry services to our clients and healthcare professionals.”


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Phillips DiPisa and Leaders For Today

Meanwhile, Phillips DiPisa and Leaders For Today, based in the Boston area, offer a range of leadership staffing and permanent placement solutions for the healthcare industry. Phillips DiPisa is an executive search firm with offices in Atlanta, Chicago, Los Angeles and Philadelphia. Leaders For Today provides interim and permanent leadership workforce solutions. Both businesses have a particularly strong presence and market share in the important Northeast region. The purchase price was $30 million, with potential for an additional $7 million based on future financial performance. The combined firms generated revenues of about $23 million last year. The acquisition is expected to be immediately accretive to AMN’s earnings per share.

“Healthcare organizations are looking for strong, experienced leaders to guide them through this period of unprecedented change,” said Ms. Salka. “The addition of Phillips DiPisa and Leaders For Today will expand our leadership placement services for the C-suite, meeting a critical need for healthcare executive teams and their boards as they navigate consolidation and develop ways to optimize their workforce and deliver high-quality care.”


Heidrick & Struggles Healthcare and Life Sciences Practice Partner Charles Moore Joins New York Office
“New York and the East Coast continue to be a major hub in the healthcare industry, and we look forward to Charles bringing his global perspective and professional expertise to this region,” said John Mitchell, global managing partner for the unit at Heidrick.


“Our purpose has always been to partner with healthcare organizations in finding the best leaders for their business,” said Dan Phillips, founder and partner of Phillips DiPisa. “We are thrilled to bring our expertise in executive-level searches to AMN Healthcare, where together we can deliver even greater value to our clients and the ever-evolving healthcare community.”

With an extensive background in healthcare recruiting, information technology and finance, Mr. Phillips provides counsel on many human capital and resource issues. Those include organizational structure, position definition, compensation packages, employee retention and other critical issues.

MedPartners

MedPartners, based in Tampa, provides solutions that help maximize healthcare facilities’ revenue integrity, improve patient care management and support care-quality reporting requirements. MedPartners generated 2017 revenue of about $125 million with an adjusted EBITDA margin of 16 percent. The MedPartners acquisition is expected to be immediately accretive to AMN’s earnings per share.

Related: HR Trends Impacting Healthcare Recruiting Specialists

“We are proud of the work we have done to move the healthcare industry forward, delivering the highest quality services to our clients and opportunities to our candidates,” said Marci Wilhelm, president and co-founder of MedPartners. “We are looking forward to bringing our capabilities to AMN Healthcare and expanding the reach of our innovative solutions.”

Growth by Acquisition

Over the last few years, acquisitions have been a key growth driver for AMN Healthcare. In 2015, the company took over Onward Healthcare, a nurse and allied healthcare staffing firm; First String Healthcare, a nursing focused recruiting firm; and Millican Solutions, a physician executive search firm that serves academic medical centers and children’s hospitals.

In 2016, AMN Healthcare acquired healthcare-focused executive search firm B.E. Smith for $160 million. Founded in 1978, B.E. Smith is a full-service healthcare interim leadership placement and executive search firm. For nearly a decade, it has been recognized annually by Modern Healthcare as one of the top search firms in its sector. The firm places interim leaders and executives across all healthcare settings, including acute care hospitals, academic medical and children’s hospitals, physician practices and post-acute care providers.


AMN Healthcare Services Finalizes Acquisition of B.E. Smith
AMN Healthcare Services, a provider of healthcare workforce solutions and staffing services, has completed its acquisition of healthcare-focused executive search firm B.E. Smith for $160 million in cash.


Active Healthcare Sector

AMN may well be bulking up its recruiting services in response to the continuously booming healthcare sector. Healthcare is among the most rapidly growing employment fields, according to analysts at Hunt Scanlon Media, which tracks trends in the executive search and leadership solutions space.

Related: AMN Healthcare To Acquire B.E. Smith For $160 Million In Cash

According to the newly released U.S. Bureau of Labor Statistics report, healthcare added 22,000 jobs, about in line with its average monthly gain over the prior 12 months. Employment continued to trend up over the month in ambulatory healthcare services (+16,000) and hospitals (+10,000).

The U.S. healthcare system has undergone its most dramatic reform in over three decades, shifting towards a team-based care model driven by value-based reimbursements and capitated contracts for population health management. “As a result, healthcare organization are undergoing major clinical, operational and technological transformations, causing organizations to re-evaluate the kind of business and clinical leaders they need to successfully deliver care in this new environment,” said John Gramer, president of Cejka Executive Search, a specialist recruiter serving the healthcare space. “At the same time, the U.S. is facing increasing demand for healthcare services, thanks to the aging population and surge in the newly insured and not enough physicians to meet that demand.”

“So, healthcare organizations are looking for expanded skill-sets in one of the most resource-constrained employment markets in decades,” said Mr. Gramer. “The result is fierce competition for top healthcare talent, and growing demand for organizational design, succession planning and search services to help define and build the healthcare leadership teams of the future.”

Mr. Gramer characterized today’s healthcare employment market as among the most competitive and complex in decades. “Both healthcare leaders and practicing clinicians have greater career choices than in the past,” he said. “Healthcare reform has created additional opportunities for healthcare leaders to oversee care coordination, utilization management, employee health, and population health.”

Related: Physician-Focused Recruiter Acquired for $4 Million

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Andrew W. Mitchell, Managing Editor – Hunt Scanlon Media

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