Author Topic: PSS looks to acquire more companies  (Read 1113 times)

Doctor_K

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PSS looks to acquire more companies
« on: June 04, 2010, 09:17:30 AM »
From the Jacksonville Business Journal:
http://www.bizjournals.com/jacksonville/stories/2010/05/24/daily39.html
Quote
PSS World Medical Inc. plans to become more aggressive with mergers and acquisitions in the coming year, the company said Thursday at its annual analyst’s day in Chicago.

Maintaining its fiscal 2011 earnings-per-share guidance of $1.27 to $1.31, or 8 to 11 percent growth, company officials said about 2 cents EPS would come from acquisitions. A portion of management compensation is now tied to the goal.

Activities in mergers and acquisitions for Jacksonville-based PSS, a distributor of medical products and equipment, is expected to be more on the physician side of the business as opposed to elder or home care, said Mickey Schleien, an analyst with Ladenburg Thalmann & Co. Inc.

“The company is not opposed to adding another leg to its business, but such a move is not at the forefront because management believes significant opportunities remain in the current business including further expansion of the company’s own brands — Select, Repara, Respirex, etc. — which carry stronger margins,” Schleien said in a note. “This business is approaching $400 million in revenue and is contributing three-quarters of the incremental margin gain the company is experiencing with respect to product sourcing.”

Although William Blair & Co. analyst John Kreger sees a key positive in the company’s room for operating margin expansion, there is some risk in its mergers and acquisitions strategy.

“Key potential risks, in our opinion, are the impact to PSS of the current trend of hospitals purchasing physician practices and what we view as somewhat aggressive physician segment growth rates assumed in fiscal 2011 guidance,” Kreger said.

Read more: PSS looks to acquire more companies - Jacksonville Business Journal
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Jason

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Re: PSS looks to acquire more companies
« Reply #1 on: June 04, 2010, 11:09:27 AM »
Good news.  I'd love to see them continue to grow and become another major player with a DT Jax address.  God knows, we could use the jobs!