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HCA Unit to Buy ClearLight's Subsidiary

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Recently, Parallon Business Solutions – a wholly owned subsidiary of HCA Holdings, Inc. (HCA) – signed a definitive agreement to buy The Outsource Group, Inc. from ClearLight Partners, LLC. The financial terms of the deal were not divulged. The acquisition is expected to close by the end of Jun 2013.

The Outsource Group is among the largest privately held healthcare firms in the U.S. that provides revenue cycle management. This Mo.-based company’s clientele comprises over 160 hospitals and physician practices across 38 states.

The acquisition will enhance Parallon’s customer base. The expansion in customer base as well as the addition of The Outsource Group’s annual revenues of more than $100 million will in turn boost revenues of Parallon and HCA Holdings.

Outsourcing revenue cycle management is a growing trend among hospitals. Following an organic as well as an inorganic route, The Outsource Group positioned itself well to capitalize on the opportunities.

Thus the addition of The Outsource Group, a leading revenue cycle management company, will likely be beneficial to Parallon in the near future. The HCA subsidiary is taking the inorganic route to expanding its revenue cycle business.

The access to The Outsource Group’s revenue cycle services including full business office outsourcing, insurance billing and follow up, third-party liability, primary and secondary bad debt collections, Medicaid eligibility, early out/self-pay, onsite financial counseling and physician billing, and follow up is likely to be beneficial to HCA’s client hospitals and surgery centers as well.

HCA currently carries a Zacks Rank #3 (Hold). Other stocks worth considering in the medical sector are VCA Antech Inc.(WOOF) – Zacks Rank #1 (Strong Buy), Molina Healthcare Inc. (MOH) – Zacks Rank #1 (Strong Buy) and Acadia Healthcare Company, Inc. (ACHC)– Zacks Rank #2 (Buy).

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