After acquiring University Health Care in mid-June for $600 million, Cano Health (NYSE: CANO) has already struck another deal. Cano Health announced last week it is acquiring Doctor’s Medical Center (DMC), which provides integrated, innovative care to Medicare, Medicaid and ACA members in South Florida. Founded in 1996, it has grown to 18 medical centers located in Miami-Dade and Broward counties. The deal is valued at $300 million cash, and concurrent with the acquisition, Cano Health borrowed $250 million through an unsecured debt facility.
DMC is expected to generate $194 million in revenue and $22 million in EBITDA in 2021.
The combination with DMC increases Cano Health’s membership to approximately 197,000 members and 106 medical centers, with over 1,000 staff and affiliated providers across the country. DMC’s EBITDA is expected to grow 30%-40% year over year in 2022.
And more good news from the deal. With this acquisition, Cano Health is updating its previous guidance for the year given on June 14, 2021. Now, Cano Health expects FY 2021 revenue of approximately $1.5 billion (from $1.4–$1.5 billion previously), an increase of approximately 80% year-over-year, and FY 2021 adjusted EBITDA of approximately $110 million (from $100 million to $110 million previously).
However, these numbers aren’t static. Cano Health stated in the release for the deal that “the acquisition pipeline remains robust; future acquisitions would be accretive to the above guidance.” The primary care operator has already made a big splash in the M&A market since it went public through a SPAC reverse merger, so we expect some more big announcements in the future.
