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AMN to acquire healthcare staffing firms and VMS for $82.5 million

December 18, 2014

AMN Healthcare Services Inc. (NYSE: AHS), the largest US healthcare staffing firm, agreed to acquire Onward Healthcare, Locum Leaders and VMS provider Medefis from OGH LLC for a total purchase price of $82.5 million. OGH is a healthcare and technology holding company whose principal shareholder is New York-based private equity firm Welsh, Carson, Anderson and Stowe.

The transaction is expected to close by mid-January, subject to regulatory approvals and customary closing conditions. It is expected to be accretive to AMN’s earnings in 2015. The acquisition will be funded out of cash on hand and borrowings under the company’s existing revolving credit facility.

“This acquisition is interesting in that it allows AMN to both increase its fill rates through the nurse & allied and locum tenens staffing businesses it will acquire, while at the same time it also helps to solidify AMN’s position as a dominant player in the healthcare VMS space with the acquisition of Medefis, a leading SaaS VMS provider,” said Staffing Industry Analysts Research Associate David Francis.

Locum Leaders is an Alpharetta, Ga.-based locum tenens provider, acquired by OGH in May 2013. Medefis, a provider of a SaaS-based vendor management system for healthcare facilities, was founded in 2003 and is headquartered in Omaha, Neb. Onward Healthcare is a national nurse and allied healthcare staffing firm founded in 2002. The company is headquartered in Wilton, Conn., and maintains regional operations in Solana Beach, Calif., Englewood, Colo., Deerfield Beach, Fla., Livingston and Mount Laurel, N.J., Albuquerque, N.M., and Melville, N.Y.

The  acquired firms’ brands and divisional leadership will remain in place, although some executive leadership may not continue with the company, AMN said in a conference call with investors.

The 2014 projected consolidated revenue for the three companies is $112 million, with anticipated EBITDA of approximately $10 million. This includes about $78 million form nurse and allied staffing, $28 million from Locum Leaders and $6.5 million from Medefis, according to the conference call.

“This acquisition will enable us to increase the fill rates of our clients’ critical staffing needs,” said AMN President and CEO Susan Salka. “As a combined company, we are immediately growing our talent pool of quality clinicians and physicians and adding experienced sales and service team members.”

“At the same time, we are further enhancing our workforce solutions offering with the addition of Medefis, a differentiated and highly regarded VMS technology that provides healthcare facilities with another vendor-neutral option to streamline the management of their contingent labor,” Salka said.