Leading healthcare information technology provider Medical Transcription Billing, Corp. (NASDAQ: MTBC; MTBCP) this month completed its acquisition of medical billing company MediGain in a move widely expected to significantly boost its overall revenue in 2017 and offer improved services to its now enhanced customer base. According to Medical Transcription Billing Chief Financial Officer Bill Korn, the $7 million acquisition of Texas-based MediGain, LLC and its New Jersey subsidiary Millennium Practice Management, LLC, is the largest acquisition in the history of his company.
Medical Transcription Billing has made an initial payment of $2 million for the MediGain assets and will pay an additional $5 million in early 2017. This is a significant discount compared to the industry norm of greater than one times revenue, Korn explained. For organic growth, one of the largest IT companies in the healthcare industry, athenahealth (NASDAQ: ATHN), spent roughly $230 million on sales and marketing last year, with a revenue growth of $172 million, so MTBC paid less than others might spend to grow the business organically.
The deal marks a major corporate milestone for MTBC and shows the power of its acquisition-based growth strategy, Korn said. He added that the revenue cycle management customer accounts and other assets acquired from MediGain have annual revenues of more than $10 million, which is expected to contribute significantly to Medical Transcription Billing’s revenue growth in 2017. In turn, the company expects to greatly improve its operations and services as a direct result of this revenue growth, which will most likely push MTBC further up the list of top providers of technological solutions to the healthcare industry, alongside companies such as athenahealth. In addition, the profits resulting from the MediGain acquisition are expected to exceed the company’s capital costs, so the transaction should be accretive to the shareholders next year.
Another direct result of the MediGain acquisition is the expansion of Medical Transcription Billing’s team. The acquisition enabled the company to add many new members to its North America team and expand its team in Asia to additional countries such as India and Sri Lanka, where there is a highly-qualified and cost effective medical billing workforce. In Sri Lanka, for instance, MTBC now has the largest team of healthcare technology professionals in the country. Also part of the acquisition, MediGain’s former chief operating officer, Gary Smith, will now lead MediGain Practice Management.
As it integrates MediGain and the new revenue cycle management customer accounts, Medical Transcription Billing will continue to leverage its proprietary technology and global team of professionals to improve operations and provide world-class service to all its clients. The company is already serving a wide range of healthcare entities and customers, from individual physicians to medium size medical practices, and has partnered with various healthcare organizations to expand its reach nationwide and globally.
For more information, visit www.MTBC.com
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