After Rounds Of Financing, Is Healthcare M&A Picking Up?

Dana Hambly, an analyst at Stephens, wrote, "AMSG's announcement is more specific to the size and timing of the deals which provides more clarity on valuation, but we view MD's decision to put some permanent financing in place right now as bullish for their pipeline as well. This should buoy shares of both stocks in the near term and we continue to see longer-term upside as cash flow characteristics are excellent, providing ample liquidity to capitalize in the rapidly consolidating physician staffing sectors."

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Amsurg announced plans to conduct a stock offering of 5.5 million shares of stock with the intention of paying down $276 million of debt and pursuing acquisitions. MEDNAX announced plans to offer $500 million of senior notes with the intention of, similar to Amsurg, paying down their revolver and pursuing acquisitions.

Stephens sees these moves as bullish for their acquisition pipeline with both companies seeking accelerated growth opportunities.

Amsurg closed Tuesday at $82.14, down 2.28 percent.

MEDNAX closed Tuesday at $72.22, up 1.19 percent.