Moody's raises warning flag on AmSurg's Sheridan deal

Equity investors last week lapped up the news that AmSurg plans to acquire physician services company Sheridan for more than $2 billion, but debt ratings agency Moody's isn't nearly as ebullient. Analysts Ron NeySmith and Peter Abdill say they are putting AmSurg's Ba3 rating under review for a downgrade because the Sheridan deal will push the company's debt levels to about six times its EBITDA. CFO Claire Gulmi last week said the AmSurg team expects to quickly work that ratio back down into the 4s, but the Moody's analysts say they see the Sheridan transaction marking a shift to "a much more aggressive acquisition strategy."