PhyCor Inc. said Wednesday it will buy MedPartners Inc. for $8 billion in stock and assumed debt, combining the two biggest managers of physicians’ practices as the U.S. health-care industry consolidates.
Together, the two companies will have $8.4 billion in annual revenue. Nashville-based PhyCor will issue 236 million shares and assume $1.2 billion in debt to take over the bigger MedPartners, based in Birmingham, Ala.
Both companies have grown rapidly over the last two years by snapping up smaller competitors. With the acquisition, PhyCor acquires its biggest rival and adds MedPartners’ expertise in working with managed-care companies, analysts said.
“They’re going to be the tiger of the industry,” said Amy de Rham, an analyst at NationsBanc Montgomery Securities Inc. who has “buy” ratings on both companies.
There’s not likely to be trouble with antitrust issues, she said. Even combined, the two companies will represent about 5 percent of the more than 600,000 doctors in the U.S.
