Use the Internet or Strayer Library to research a publicly traded company that r
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Use the Internet or Strayer Library to research a publicly traded company that recently acquired another company.
Analyze the performance of the combined company and ascertain at least two benefits that the combined companies gained from the acquisition.
Elaborate on your observations, including examples.
Select Medical Corporation has made numerous mergers and acquisitions over the last decade. All merged and acquired companies are included in the consolidated financial statements under Select Medical Holdings. The largest merger was in 2015 with Concentra Operating Corporation. With the acute care and outpatient divisions seeing more cuts due to new regulations, Select Medical made the decision to concentrate on the occupational health segment that came with Concentra. In early 2018, Concentra acquired US Healthworks, based in California. At the time, US Healthworks was the 2nd largest occupational health provider in the United States.
The acquisition gave Select a broader customer base within urgent care and workforce health care needs. In fact, in the period between 2014 and 2019, the acute care segment saw a drop in revenue by 26%, compared to the 30% increase in revenue from occupational medicine. As a result, Select’s reliance on payments from Medicare by nearly 20% (JP Morgan, 2). In the 2018 annual report, Concentra’s net operating revenues and total assets increased significantly compared to Select’s other segments. The acquired company continued to perform in 2019. According to the notes found in the financial statements for Select Medical Holdings, US Healthworks contributed more than $488 million in revenue for the year ended December 31, 2019 (SEC, 1). Another noteworthy financial benefit from the acquisition was the $38 million in cost savings synergies. For example, expenses have been condensed in research, marketing, technology, and salaries because of the acquisition. By 2020, Select holds the largest market in occupational health in the United States (JP Morgan, 3).
SEC Filings, Edgar System. 2020. Select Medical Holdings Corp.
Select Medical. FEBRUARY 25, 2019. J.P. MORGAN GLOBAL HIGH YIELD & LEVERAGED FINANCE CONFERENCE.
Select Medical. FEBRUARY 24-26, 2020. J.P. MORGAN GLOBAL HIGH YIELD & LEVERAGED FINANCE CONFERENCE.