Cross Country Healthcare, Inc. (CCRN), a provider of healthcare staffing and workforce management solutions, has completed the acquisition of Workforce Solutions Group, Inc. (WSG) in a cash and stock deal effective June 8.
WSG primarily works with local and national healthcare plans and managed care providers to coordinate in-home care services for participants.
The acquisition helps CCRN expand its footprint in the home-care business and enhance its service to the aging population, thereby enabling them to remain independent in their own homes for as long as possible. (See CCRN stock analysis on TipRanks)
Per the terms of the deal, WSG was paid $25 million in cash and $5 million worth of CCRN common stock, subject to net working capital adjustments. Additionally, sellers are also entitled to receive an earn-out based on WSG’s 2021 through 2023 performance that could run up to an additional $15 million over the three years.
In connection with the buyout, CCRN has taken up a $100 million second-lien term loan with a 6-year maturity, carrying an interest rate of one month LIBOR plus 5.75% per annum.
The cash consideration of $25 million and certain costs, fees, and expenses connected with the deal was paid from proceeds of the term loan, and the balance was used to pay down part of the asset-based line of credit.
Kevin C. Clark, Co-Founder and CEO of Cross Country Healthcare said, “I am excited about the managed service offerings provided by WSG that help healthcare facilities manage the complexities of sourcing, recruiting, and employing healthcare professionals to meet the needs of patients requiring care in the home or in the community versus going to a nursing home.”
Following the company’s Q1 results, Barrington analyst Kevin Steinke reiterated a Buy rating on the stock and stated that the company’s Q1 results and Q2 guidance were both considerably ahead of the expectations. The analyst lifted the price target from $14 to $17, which implies 4.9% upside potential to current levels.
The stock has a Moderate Buy consensus rating based on 3 Buys versus 3 Holds. The CCRN average analyst price target of $15.63 implies 3.5% downside potential to current levels. Shares have exploded 149.2% over the past year.
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