Cross Country Completes Knox Lane Sale, Goes Private
The $437 million acquisition closed July 21, separating the company’s locums business.
Cross Country Healthcare (CCRN), the healthcare staffing provider, completed its sale to Knox Lane and became a privately held company. The transaction had been expected to close in the third quarter of 2024.
The closing shifted the focus from Cross Country’s tentative operating recovery to its new ownership. The company entered the deal after its proposed merger with Aya Healthcare was terminated in December 2023, bringing Cross Country a $20 million termination fee.
In its last reported operating quarter, revenue rose 2% sequentially to $241.1 million after declining 5% in the fourth quarter. Revenue remained 18% below the prior-year period, an improvement from the fourth quarter’s 24% year-over-year decline.
Nurse and Allied Staffing drove the sequential increase, with revenue rising 4% to $201.4 million as average full-time-equivalent staffing and revenue per worker-day increased. Physician Staffing weakened, with revenue falling 7% sequentially to $39.6 million as days filled declined.
Profitability remained under pressure. Gross margin narrowed to 19.7%, while adjusted EBITDA slipped 5% sequentially to $3.9 million and its margin contracted to 1.6%. The GAAP net loss narrowed to $4.3 million from $82.9 million in the fourth quarter, which included a $77.9 million impairment and a $29.6 million deferred-tax valuation allowance.
Operating cash flow fell to $4.8 million from $18.2 million in the fourth quarter, when the Aya termination fee supported cash generation. No updated revenue, earnings, margin, segment-volume or cash-flow figures were provided following the move to private ownership.
Joel Tremblay became chief executive upon completion of the acquisition, while co-founder, chief executive and chairman Kevin Clark retired from his leadership roles. Knox Lane also placed Cross Country’s locums division with portfolio company All Star Healthcare Solutions, separating that operation from the privately held Cross Country platform.