US independent medical examinations provider ExamWorks Group Inc (EXAM) said it planned to buy Texas-based MES Group Inc for about $200 million in cash and stock, including USD10m in debt. MES’ Veterans Evaluation Services business remains outside the deal. The takeover price comprises USD175m in cash and 1,424,501 ExamWorks shares worth some USD25m.
will use its existing cash resources and a senior revolving credit facility to finance the cash portion. ExamWorks expects that the deal will have a positive impact on its EBITDA and cash earnings, while creating significant benefits to customers, physicians, employees and shareholders. The transaction is scheduled to close in the first quarter of 2011, pending the usual regulatory clearance. William Blair & Company is acting as financial advisor to ExamWorks, while MES is advised by Raymond James.
Under the terms of the agreement, the purchase price is approximately $210 million and consists of $175 million of cash consideration, 1,424,501 shares of ExamWorks stock with a contractual value of approximately $25 million and up to $10 million of assumed debt. ExamWorks intends to finance the cash portion of the transaction using cash on hand and the Company’s senior revolving credit facility. We expect the acquisition to be accretive to EBITDA and cash earnings.
Commenting on today’s announcement, Richard E. Perlman, Executive Chairman of ExamWorks, said: “This combination will deliver greater value for our clients, physicians, employees and shareholders. MES has demonstrated strong and consistent organic revenue growth over its 33 year history. The company’s medical panel and national account program complement ExamWorks existing infrastructure. ExamWorks’ national network of local offices and service professionals are positioned to serve these national accounts by continuing to provide enhancements to the industry’s highest quality IME services and increasing the volume of IME-related referrals to our physicians. The development of national accounts is a key strategic objective for ExamWorks. Coupled with our similar cultures and unique global opportunities, we think this is the perfect opportunity for everyone.”
“This transaction is a winning combination for all stakeholders,” said George C. Turek, CEO and founder of MES Group. “Our clients can anticipate receiving the highest quality IME services, continuity of relationships and access to evidence-based services and market specific analytics to assist in the management of health cost containment. We have developed and retained the industry’s most productive and knowledgeable professionals. ExamWorks management expertise, international footprint and diversified service portfolio will provide exciting opportunities as the industry and professionals enter the next phase of growth.”
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