Acquisitions in the offing?

Word is the recent flurry of acquisitions and mergers in the work comp services industry isn’t likely to taper off any time soon.
Genex is reportedly up for sale, Injured Workers Pharmacy has seemingly been in play for months, a major managed care firm may be in play, and there is significant activity on the part of investment firms looking to buy into the PBM space.
This comes on the heels of MSC’s purchase of complex care firm Total Medical Solutions, York’s purchase of JI Companies, and the sale of Paradigm Services to an investment firm (one without much experience in workers comp), all taking place just last month, not to mention 2011, a very active year for work comp deals.
Among the likely acquirers are investment firms eager to jump into what looks like a business ripe for consolidation and automation, as well as current players seeking to add assets and services to their portfolio of companies/products/services. Expect ISG Holdings to be especially active; with Stratacare and Bunch already onboard they are positioned well to expand into related service lines.
The spate of activity may slow for a bit as sellers seek higher valuations than the current 7x EBITDA (+/-) that is around average these days, this typically happens as owners see other deals done, want to get in on the gravy train, and believe their company offspring is more valuable than others they’ve seen sold. But, with the threat of an increase to capital gains coming at the end of this year, there’s a big incentive for owners to cash out now and save big dollars in tax expense.
What does this mean for you?
Perhaps a bit of distraction, which may open up opportunities for vendors/service companies who can stay focused on their customers’ needs.