Cross Country Healthcare makes acquisition
MSN is a comprehensive healthcare staffing company which has 55 locations throughout the U.S. that provide per diem, local, contract, travel, and permanent hire staffing services. For the year ended December 31, 2013 and the four-month period ended April 30, 2014, MSN had unaudited revenues of $229 million and $78 million, respectively.
Cross Country Healthcare President and CEO William J. Grubbs said, "The acquisition of MSN's assets represents a strategically compelling opportunity for Cross Country Healthcare, accelerating our expansion plans by several years, increasing our market share and bringing us new products and opportunities to cross-sell to all of our customers. From a financial perspective, we expect this transaction to create significant value for our shareholders and meaningful earnings accretion in 2015 through increased scale, accelerated growth opportunities, and cost synergies."
The transaction is expected to be dilutive to earnings per share by $0.10 - $0.12 for 2014, primarily due to acquisition and integration related charges and accretive to 2015 earnings per share by $0.12 - $0.15. These estimates are subject to assumptions regarding the timing of the closing of the deal, the attainment of synergies, as well as the company's tax rates and the finalization of purchase accounting.
The Company has entered into commitments for subordinated debt consisting of a $30 million, 5-year variable rate term loan and $25 million of convertible notes having a 6-year maturity. The combined effective interest rate for the subordinated indebtedness is expected to be 7.72% for 2014. Cross Country Healthcare also has a commitment from its current lender, Bank of America. N.A. to increase its borrowing capacity under its senior secured asset-based revolving credit facility from $65 million to $85 million.
Consummation of the transaction is subject to customary closing conditions. It is anticipated that the Closing will occur before the end of June 2014.