Sterling Healthcare to Be Sold to FPA Medical for $208.4 Million
SAN DIEGO — FPA Medical Management Inc. said Monday that it will buy Sterling Healthcare Group Inc. for as much as $208.4 million of stock and debt to use Sterling’s managed hospital-emergency departments as the nucleus of doctors’ networks.
The companies are expected to generate $370 million in revenue this year, making FPA one of the largest physician practice managers in the nation.
FPA’s acquisition is part of a consolidation in doctors’ practice management. Last week, MedPartners/Mullikin Inc. said it would acquire Caremark International Inc. for $2.34 billion.
“This is a positive announcement for Sterling shareholders” and allows Sterling to expand beyond emergency room medicine as it previously intended, said T.J. Duncan, a vice president of Frontier Capital Management, a Boston investment firm that owns 181,000 shares of Coral Gables, Fla.-based Sterling.
San Diego-based FPA organizes groups of primary care doctors into networks, manages them and negotiates contracts for them to provide their services to health plans.
Sterling stockholders are to receive 1.4 shares of FPA for each Sterling share. Sterling rose $1.625 to $20.875; FPA closed unchanged at $17.75. Both trade on Nasdaq.
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