Image by Credit Commerce from PixabayOne of the newer publicly traded health care companies in the U.S., Ardent Health (NYSE: ARDT), is ramping up its ambulatory care M&A activity.
The Brentwood, Tennessee-based Ardent announced Friday the acquisition of 18 urgent care clinics across New Mexico and Oklahoma from NextCare Urgent Care. Financial terms of the transaction were not disclosed.
“Expanding our urgent care footprint represents significant progress in our mission to create a consumer-focused ecosystem of care in each of the communities we serve,” Ardent Health President and CEO Marty Bonick said in a statement.
Ardent Health filed the paperwork to go public with the U.S. Securities and Exchange Commission (SEC) in June.
As a company, Ardent delivers care through a system of 30 acute care hospitals and more than 200 sites of care with over 1,800 affiliated providers across six states. In addition to its hospitals, Ardent operates more than 140 primary care and specialty care clinics, multiple ambulatory surgery centers (ASCs), dozens of urgent care centers, two free-standing emergency departments and 10 diagnostic imaging centers.
Growth in its ambulatory care arm, including ASCs, is a core part of Ardent’s growth strategy.
“We have identified a robust pipeline of ambulatory opportunities, including ASCs, urgent care centers, imaging centers and freestanding emergency rooms, which will create additional access points to attract and retain patients within our markets,” the company’s S-1 filing with the SEC noted.
Buying 18 urgent care clinics from NextCare Urgent Care could signal Ardent’s ambitions to make good on this promise.
The transaction includes six urgent care clinics in New Mexico, which will operate as part of Lovelace Health System, and 12 clinics in Oklahoma, which will become part of Hillcrest HealthCare System.
The acquisition “significantly expands” Ardent Health’s ambulatory operations in both markets, according to the company. Ardent Health also recently bought nine additional urgent care centers in its Texas and Kansas in 2024.
“We’re helping patients receive the care they need, when and where they need it, by increasing access to convenient, high-quality services,” Bonick continued. “These additional access points also bring new patients into our network while creating enhanced capacity to serve patients within our clinics and Emergency Departments.”
In a note that went out after the transaction was announced on Friday, analysts from Stephens estimated the NextCare transaction’s value at about $28 million, or roughly 7 times annual 2024 EBITDA.
“Notably, the ~$28 million outlay already puts ARDT beyond its targeted annual M&A spend range of $20 million to $25 million, indicating potentially accelerated inorganic growth vs. our current modeling,” the note explained.
The company has been very transparent about its desire to expand on the ambulatory care side. In its Q4 2024 earnings materials, for instance, Ardent mentioned how it’s “continuing to actively evaluate additional near-term ambulatory expansion opportunities.”
Ambulatory asset investment was additionally cited as one of the company’s key capital-allocation priorities.
Ardent recorded about 23,220 outpatient surgeries in the third quarter of 2024, in line with the 23,164 it reported in the same period a year prior. Overall in Q3 2024, Ardent performed about 32,091 surgeries, according to company financial filings.
“We see the continued shift from inpatient to outpatient, like the industry is seeing,” Bonick said during Ardent’s third-quarter earnings call. “So that is a part, a portion of our planning in terms of growing our ASCs in … our existing markets in partnership with physicians. So that will be a continued focus for us to grow.”
Ardent exited 2024’s third quarter with $563.1 million of cash on hand.
Total revenue for Ardent during the quarter was $1.45 billion.
“With our strong balance sheet and recent IPO, we are well positioned to execute on growth opportunities and continue improving the quality of care in the communities we serve,” Bonick added during the Q3 2024 earnings call.
