BY Fraser Tennant
Continuing its recent, high-profile mergers & acquisitions (M&A) activity within the healthcare sector, private equity (PE) firm KKR is to acquire US medical staff provider Envision Healthcare in a deal valued at $5.57bn.
The acquisition of Envision saw global investment giant KKR see off competition from Carlyle Group, TPG Global and others to seal the deal for $46 per share. The agreement is an all-cash transaction, including the assumption or repayment of debt.
"Envision is a leading provider of physician-led services in a healthcare system in which physician-patient interactions have a pronounced impact on nearly all healthcare decisions,” said Jim Momtazee, head of KKR's healthcare investment team. “Envision has a very strong reputation for delivering high-quality, patient-focused care through its network of 25,000 clinical professionals at thousands of hospitals, surgery centres and alternate sites of care across the country.”
No stranger to Envision Healthcare, KKR already owns Envision American Medical response (AMR), the largest US provider of ambulance services, which it bought for $2.4bn in 2017 and merged with its helicopter ambulance service. Another healthcare sector deal last year saw KKR take WebMD Health Corp private for an estimated $2.8bn.
The agreement for KKR to acquire Envision Healthcare has been unanimously approved by Envision's board of directors and represents the culmination of the board's comprehensive review of strategic alternatives to enhance shareholder value.
Over the last seven months, the Envision Healthcare board, with the assistance of three independent financial advisers and legal counsel, examined a full range of options to generate shareholder value, including capital structure alternatives, potential acquisitions, portfolio optimisation, a potential sale of the whole company, and continued operation as a standalone business.
"After conducting a robust review of the business and competitive landscape, the company's opportunities and challenges, and the strategic and financial alternatives available, the board unanimously believes that this transaction will deliver the most value to Envision's shareholders,” said James D. Shelton, Envision's lead independent director.
The transaction is expected to be completed in the fourth quarter of 2018 and is subject to customary closing conditions and regulatory approvals.
Mr Momtazee concluded: “We are excited to partner with the outstanding team at Envision Healthcare to help build upon the strong foundation in place and accelerate the organisation’s growth going forward."