Cross Country Healthcare, Inc. (NASDAQ: CCRN) hasn’t announced an acquisition in more than a year. The company posted some rather soft numbers in Q1:17, owing to the slow pace of ramping up some new business wins in 2016. CEO William Grubbs told analysts on the following earnings call on May 4 that he still wasn’t satisfied with the results. What better remedy for slow organic growth than to make an acquisition?
On June 13, the company announced it will pay an aggregate price of $88 million to acquire substantially all of the assets and business of Advantage RN, LLC and its affiliates, Advantage On Call, Advantage Locums and Advantage RN Local Staffing (“Advantage”). Advantage, based in West Chester, Ohio, is an independent travel nurse staffing company. It deploys many of its nurses through managed service providers and vendor management systems and maintains direct relationships with many hospitals.
The deal will increase Cross Country’s supply of healthcare professionals, expand its capture rate at its managed service providers accounts, and expand its workforce solutions business. The founder and CEO of Advantage, Matt Price, will remain with the business after the transaction closes.
Cross Country Healthcare also entered into a commitment to increase the borrowing capacity under its current credit facility by $40 million, in connection with this transaction. The purchase price is subject to a post-closing working capital adjustment. The deal is being financed through cash-on-hand and borrowings under its senior credit facility.
Closing is expected in the third quarter of 2017.
