Pediatric Services inks credit deal to fund acquisitions

Sunday, February 29, 2004

NORCROSS, Ga. - Pediatric Services of America announced last month that it completed a $20 million credit agreement with General Electric Capital Corporation to relieve costs and fund future acquisition goals.
The agreement, which will run until Oct. 14, 2007, includes a $10 million revolving credit line for general operating needs. A second $10 million acquisition credit line is in place for the specific use of expanding PSA and its services, either through acquisition or start-ups.

“We have done acquisitions in the past out of existing cash flow, but we felt we needed a line in place in case we wanted to accelerate that process,” said PSA’s President and CEO Joseph Sansone.

Sansone said PSA currently is looking at several acquisition opportunities to build on its core business of pediatric nursing, equipment and infusion services. The company also would consider strategic respiratory expansions.

The pediatric home health market is ripe for growth, earning about $5 billion a year or about 10% of the total home care market, according to Sansone.

“Given our space, the market has opportunities for us and we tend to be pretty active in that space,” he said.

In addition to the new credit line, Pediatric Services also got a boost from the release of its 2004 first quarter financial report. The company saw a 14% increase in net revenue over the previous year and a 38% increase in its operating income.

PSA currently has 120 locations in 22 states, but its first goal for 2004 is to further grow its numbers and reach.

“Our plan is to continue our growth strategy both with internal growth, startups and acquisitions, but other than that it’s business as usual,” said Sansone.