Barclays Maintains an 'Overweight' on Universal Health Services (UHS); Thoughts on Knapp Medical Center Acquisition
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Price: $177.26 +2.54%
Rating Summary:
11 Buy, 19 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
11 Buy, 19 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Barclays maintains an 'Overweight' on Universal Health Services (NYSE: UHS) price target of $55.00.
Barclays analyst says, "UHS announced that it had executed a definitive agreement to acquire the Knapp Medical Center in Weslaco, Texas. UHS has not disclosed the purchase price for these hospitals, but we believe that it likely paid a multiple of 0.7x to 1.0x revenue, close to the historical average for acquisitions. The company noted that it expects this acquisition to close in the first quarter of 2012. With this transaction, UHS will be acquiring a 226 bed hospital, the Knapp Surgery Center, Mid Valley Physician Association, the Knapp Medical Group (a physician group practice) and some associated real estate. UHS also disclosed that the town of Weslaco is located roughly 20 miles east of McAllen and Edinburg where UHS currently operates four acute care hospitals, one behavioral health hospital and an ambulatory center. We note that UHS has disclosed in the past that it would look to complete acquisitions that enhance an existing franchise. Additionally, we note that UHS has disclosed in the past that it faced an increased level of competition in the McAllen market. As such, the company's announcement of an increased investment in this market is not a surprise."
For an analyst ratings summary and ratings history on Universal Health Services click here. For more ratings news on Universal Health Services click here.
Shares of Universal Health Services closed at $40.22 yesterday.
Barclays analyst says, "UHS announced that it had executed a definitive agreement to acquire the Knapp Medical Center in Weslaco, Texas. UHS has not disclosed the purchase price for these hospitals, but we believe that it likely paid a multiple of 0.7x to 1.0x revenue, close to the historical average for acquisitions. The company noted that it expects this acquisition to close in the first quarter of 2012. With this transaction, UHS will be acquiring a 226 bed hospital, the Knapp Surgery Center, Mid Valley Physician Association, the Knapp Medical Group (a physician group practice) and some associated real estate. UHS also disclosed that the town of Weslaco is located roughly 20 miles east of McAllen and Edinburg where UHS currently operates four acute care hospitals, one behavioral health hospital and an ambulatory center. We note that UHS has disclosed in the past that it would look to complete acquisitions that enhance an existing franchise. Additionally, we note that UHS has disclosed in the past that it faced an increased level of competition in the McAllen market. As such, the company's announcement of an increased investment in this market is not a surprise."
For an analyst ratings summary and ratings history on Universal Health Services click here. For more ratings news on Universal Health Services click here.
Shares of Universal Health Services closed at $40.22 yesterday.
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