Before the opening bell, Medical Transcription Billing, Corp. (NASDAQ: MTBC; MTBCP) issued a news release giving prospective shareholders additional insight into the company’s acquisition of MediGain, LLC. In the update, Mahmud Haq, chief executive officer of MTBC, highlighted the importance of the acquisition to the company’s growth strategy.
“As announced last week, we are very pleased to have acquired MediGain, which marks an important corporate milestone as our largest acquisition to date, and demonstrates the highly strategic nature of our successful, acquisition-based growth strategy,” Haq stated.
In the news release announcing the acquisition, MTBC CFO Bill Korn stated that the company completed the acquisition “at a compelling valuation that represents a significant discount as compared to the industry norm.” This morning’s update highlighted that MTBC, through wholly-owned subsidiary MTBC Acquisition, Corp., acquired all of the assets of MediGain and its affiliate for a purchase price of $7 million, which included $2 million paid at closing with a remaining balance of $5 million due at the beginning of next year.
Korn went on to predict that the addition of MediGain and affiliate Millennium Practice Management, LLC to MTBC will “contribute to our positive Adjusted EBITDA by the end Q1 2017.” This assessment was further validated with this morning’s update. In total, the accounts in good standing that were acquired as part of the MediGain acquisition are expected to contribute more than $10 million of annual revenues to fuel MTBC’s financial growth in 2017. With this performance, MTBC management expects incremental profits from the MediGain acquisition to greatly exceed its cost of capital, putting it on course to be accretive to the company’s shareholders as early as 2017.
To learn more about the MediGain acquisition, view MTBC’s Form 8-K at http://dtn.fm/4dGUh
“There are significant synergies between the two companies,” Gary Smith, a provider of leadership to MediGain Practice Management, explained in this morning’s update. “Our global team of professionals and proprietary technology will allow us to continue improving operating margins while delivering world-class service to our clients.”
On October 3, MTBC originally announced the closing of the MediGain acquisition, marking its largest acquisition to date. Included in the transaction, MTBC acquired substantially all of MediGain’s assets, including existing customer accounts, intellectual property, and offshore operations in both India and Sri Lanka. In addition to strengthening its total number of accounts, the acquisition effectively bolstered the MTBC team with talented members in North America while greatly expanding its Asia-based operations into new markets with “talented, cost-effective workforces.”
For more information, visit www.MTBC.com
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