View printer-friendly version << Back
MEDNAX Announces Agreement to Acquire Cardon Outreach

Significantly Expands Management Services Capabilities and Scale

FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--Jun. 13, 2016-- MEDNAX, Inc. (NYSE:MD), the national health solutions partner specializing in neonatal and other pediatric services, anesthesia, maternal-fetal, radiology, pediatric cardiology and other physician and management services, today announced the recent signing of a definitive agreement to acquire Cardon Outreach, a leading provider of third-party eligibility and other revenue cycle management services for hospitals, for $400 million. The company will become a wholly owned subsidiary of MedData, a MEDNAX company. Including the addition of Cardon, MedData’s operations will consist of approximately 2,000 employees.

Founded in 1996, Cardon Outreach provides services and technology solutions focused on helping hospitals and healthcare systems lower costs, reduce operating and capital expenses, recover revenue, and increase productivity. The company provides specialized eligibility assistance, accounts receivable recovery services, third-party liability, workers’ compensation, social security disability, denials management and appeals, and patient financing/early out programs to more than 800 hospitals and other healthcare facilities in 46 states.

“We believe the addition of Cardon Outreach significantly advances the strategic development of our management services capability,” said Roger J. Medel, M.D., Chief Executive Officer of MEDNAX. “Our hospital partners face numerous challenges in the evolving healthcare environment, many of which relate to the dramatic expansion of Medicaid coverage across the country and the increasing financial responsibility placed on the shoulders of patients. We believe the solutions we can provide, through an integrated management-services offering, directly address these challenges. Additionally, we believe that the combination of MedData and Cardon Outreach, complemented by our existing hospital relationships, can provide us with the opportunity for significant future growth through cross-selling of our diverse solutions.”

“Cardon Outreach is a clear market leader of revenue cycle management services,” said Ann Barnes, President and Chief Executive Officer of MedData. “As reimbursement models evolve to reflect a more value-based, consumer friendly healthcare system, so do our clients’ needs for innovative revenue cycle management solutions. Our combined capabilities will enhance MedData’s ability to provide superior patient-focused services with an even richer set of offerings to reduce costs and optimize clients’ operations.”

Based on current estimates, Cardon is expected to generate 2016 annualized earnings before interest, taxes, depreciation and amortization (EBITDA), a non-GAAP measure, of $36 million.

The acquisition is expected to be immediately accretive to earnings. MEDNAX expects an initial contribution of $0.06 in annualized diluted earnings per share, which is net of an expected $0.08 per share in annualized non-cash amortization expense and also includes certain transaction-related and one-time expenses. MEDNAX anticipates that this contribution will increase in the foreseeable future, based on expected percentage growth in organic revenue at Cardon estimated to be in the low double digits. MEDNAX’s estimate of expected depreciation and amortization expense with respect to the acquisition is preliminary and remains subject to the completion of a third-party valuation to determine the fair value of the underlying net assets.

The transaction is subject to customary closing conditions, including regulatory approvals and is expected to close within the next 30 days.


Cardon Outreach is a leading, national provider of revenue cycle management services for more than 20 years. The company delivers solutions that work to more than 800 hospitals and other healthcare facilities through its integrated service lines, single technology platform and patient-centered advocacy. Cardon’s clients rely on the strength of its people, processes and technology to optimize the performance of their revenue cycle, while their patients receive improved access to healthcare.


MEDNAX, Inc. is a national health solutions partner comprised of the nation's leading providers of physician services. Physicians and advanced practitioners practicing as part of MEDNAX are reshaping the delivery of care within their specialties and subspecialties, using evidence-based tools, continuous quality initiatives, clinical research and telemedicine to enhance patient outcomes and provide high-quality, cost-effective care. The Company was founded in 1979, and today, through its affiliated professional corporations, MEDNAX provides services through a network of more than 3,300 physicians in all 50 states and Puerto Rico. In addition to its national physician network, MEDNAX provides services to healthcare facilities and physicians in over 40 states through two complementary businesses, consisting of a revenue cycle management company and a consulting services company. Additional information is available at

Non-GAAP Measures

This press release includes a non-GAAP financial measure. Earnings before interest, taxes and depreciation and amortization (“EBITDA”) consists of net income before interest expense, income taxes and depreciation and amortization. The Company believes EBITDA provides investors with useful supplemental information to compare and understand its underlying business trends and performance across reporting periods on a consistent basis. This measure should be considered a supplement to, and not a substitute for, financial performance measures determined in accordance with GAAP. In addition, since non-GAAP measures are not determined in accordance with GAAP, they are susceptible to varying calculations and may not be comparable to other similarly titled measures of other companies.

For a reconciliation of the expected EBITDA related to this acquisition to the most directly comparable GAAP measure, refer to the tables below (in millions).

Certain statements and information in this press release may be deemed to contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may include, but are not limited to, statements relating to our objectives, plans and strategies, and all statements, other than statements of historical facts, that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future. These statements are often characterized by terminology such as “believe”, “hope”, “may”, “anticipate”, “should”, “intend”, “plan”, “will”, “expect”, “estimate”, “project”, “positioned”, “strategy” and similar expressions, and are based on assumptions and assessments made by MEDNAX’s management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. Any forward-looking statements in this press release are made as of the date hereof, and MEDNAX undertakes no duty to update or revise any such statements, whether as a result of new information, future events or otherwise. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. Important factors that could cause actual results, developments, and business decisions to differ materially from forward-looking statements are described in MEDNAX’s most recent Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q, including the sections entitled “Risk Factors”, as well MEDNAX’s current reports on Form 8-K, filed with the Securities and Exchange Commission.


2016 Annualized Reconciliation of Net Income to EBITDA for Cardon Outreach (1)

(in millions)


Net income   $ 7.1
Interest expense 9.0
Income tax provision 4.3
Depreciation and amortization   15.6
EBITDA $ 36.0

(1) The operating results from Cardon Outreach will only impact MEDNAX, Inc. from the date of closing.


Source: MEDNAX, Inc.

Charles Lynch, 954-384-0175, x 5692
Vice President, Strategy and Investor Relations