Mednax agreed to sell its MedData subsidiary to Seattle-based Frazier Healthcare Partners more than a quarter-billion dollars.
Brecksville, Ohio-based MedData provides technology and billing services and is not part of the core business plan of Florida-based Mednax (NYSE: MD), which is primarily an owner of physician practices.
"This agreement is an important step forward in Mednax’s ongoing transformation,” said Stephen D. Faber, a Mednax executive. “The sale of MedData will better position Mednax, both financially and strategically, for long-term shareholder value creation by allowing it to focus on its core physician services business and significantly reducing the company's leverage and future capital expenditures.”
Under terms of the pending deal, the venture capital firm will pay Mednax $250 million in cash up front, plus up to $50 million based on both the short- and long-term performance of MedData. Mednax also signed a long-term agreement to receive services from MedData that will make its medical practices among the company’s largest customers.
“We are excited to be partnering with MedData’s 2,000 dedicated employees to continue to provide best-in-class patient financial and advocacy services to the company’s broad base of customers,” said Nader Naini, managing partner of Frazier.
MedData serves more than 10,000 physicians in over 3,000 facilities nationwide. Mednax acquired the business in 2014. It announced plans to sell MedData in November 2018.
Mednax worked with Barclays and Guggenheim Securities as financial advisors and Cleary Gottlieb Steen & Hamilton LLP and McDermott, Will & Emery LLP as legal counsel for the deal. Frazier utilized Goodwin Procter LLP as legal counsel.
