Constellation Healthcare bags VEGA in US$24mln deal

03:24 EDT 23 Sep 2016 | Proactive Investors

Constellation Healthcare Technologies (LON:CHT), the US-focused medical billing services specialist, has unveiled its fifth deal since listing – the acquisition of VEGA Medical Professionals for up to US$24mln in cash and shares. The purchase is expected to be earnings enhancing in its first full year with EBITDA expected increase from US$800,000 at the last results to around US$7mln within 24 months thanks to the synergies between the two businesses. A specialist in hospital based billing, VEGA has offices in New York, New Jersey, Texas, and Pennsylvania. The nuts and bolts of the acquisition are that 78% will be paid out in cash from Constellation’s reserves and debt facility, with remainder satisfied in shares. The takeover is subject to an earn-out agreement and VEGA hitting certain financial targets. Financially, VEGA is in the same order of its last acquisition – MRDX Medical Billing, which cost an initial US$28mln. Both are part of a buy and build strategy that will help consolidate the fragmented US medical billing sector. “The acquisition of VEGA provides further evidence of CHT's ability to identify and acquire quality businesses that have significant operational synergies that are accretive to our shareholders,” said chief executive Paul Parmar.

Original Article: Constellation Healthcare bags VEGA in US$24mln deal


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