Recently, AmSurg Corporation (AMSG), a leading operator of practice-based ambulatory surgery centers (ASCs), decided to acquire Dallas based National Surgical Care (NSC) for $173.5 million in cash.
NSC, with $124.5 million in revenues in 2010, operates 18 ASCs spread across the US and includes 16 multi-specialty centers and 2 centers specializing in gastroenterology procedures. The transaction, subject to regulatory approvals, is expected to close by the end of the second quarter.
AmSurg expects this transaction to be accretive to its 2011 results (excluding transaction cost) and to 2012 financial results. The company will consider the impact of this transaction on 2011 guidance, after the deal is complete. AmSurg is working to meet the 2011 guidance of adding 18-20 new centers, which did not include the NSC deal.   
As of December 31, 2010, AmSurg operated 204 ASCs compared to 197 in the previous year. Most of the centers (about 91%) operate as a single-specialty site that performs a limited array of high-volume, lower-risk outpatient surgical procedures.
While the company’s multi-specialty setup is quite less, it will increase to 43 with this deal. The deal with NSC will enable AmSurg to diversify its portfolio and get closer to its dream of becoming a global leader in ambulatory healthcare services.
A strong cash balance enables AmSurg to target suitable acquisitions. The company exited 2010 with $34.1 million ($29.37 million at the end of 2009) of cash and cash equivalents and $283.2 million ($296 million at the end of 2009) in long-term debt. In the second quarter of 2010, the company had refinanced its debt in the form of a revolving credit facility ($375 million) and private placement of senior notes ($75 million).
The proposed acquisition of NSC is significant as economic uncertainty continues to be the major concern for AmSurg. For fiscal 2011, it expects flat-to-declining same-center procedures in 2011. Moreover, significant margin pressure is expected based on the company’s various efforts to revive growth.


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