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MEDNAX Expands Further in Florida With Radiology Affiliation

Zacks Equity Research

MEDNAX, Inc. MD has been affiliated to Boca Radiology Group, P.A., a private radiology physician group based in Boca Raton, FL. This new practice will combine with Radiology Associates of South Florida, LLC (RASF), a MEDNAX-affiliated physician practice in Miami catering to all of South Florida. This this all-cash transaction is expected to be immediately accretive to earnings. However, other terms of the deal were not disclosed.

This move is in line with the company’s strategy to expand its radiology practices, thereby cementing its position as one of the leading players in the nation. Notably, MEDNAX reads 11.8 million studies per year through its chain of more than 825 board-certified or eligible radiologists.

Meanwhile, Boca Radiology Group has been providing state-of-the-art radiology services throughout Palm Beach County for above 50 years, which makes it one of the largest private radiology practices in Southeast Florida. With this unique partnership, Boca Radiology Group would be able to provide better value-based care to people, extend its reach and withstand the evolving healthcare environment.

With the help of RASF, MEDNAX’s radiology solutions now offer imaging services to the Baptist Health South Florida (BHSF) network.

Other Acquisitions in the Same Line

MEDNAX has been constantly focusing on fortifying its radiology organization through a strong inorganic growth profile. The company purchased five radiology practices in 2018, such as Boynton Beach, a Florida-based Bethesda Radiology unit, and Las Vegas-based Radiology Specialists, LTD, a private radiology physician group, etc., which helped it bolster this business line.

Revenue Contribution From This Line

This Radiology service line contributed 8% and 12% to the company's total revenues in 2017 and 2018, respectively.

Shares of this Zacks Rank #3 (Hold) company have lost 22.8% in a year's time versus its industry's rally of 15.8%. This looks paler in comparison to its peers, namely HCA Healthcare, Inc HCA, Tenet Healthcare Corporation THC and Universal Health Services, Inc. UHS which have returned 15.6%, 75.5% and 14.6% in the same time frame. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

However, all these initiatives would likely boost MEDNAX’s revenues, which in turn, might accelerate its share price appreciation.

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