KKR buys AMR for $2.4bn


Financier Worldwide Magazine

October 2017 Issue

Combining to create a new industry leading medical transportation company, Air Medical Group Holdings Inc. (AMGH), an entity controlled by funds affiliated with multinational private equity firm KKR, and American Medical Response (AMR), a subsidiary of Envision Healthcare Corporation, have entered into a definitive agreement under which KKR will buy AMR from Envision for $2.4bn.

Structured as a cash acquisition, the transaction will lead to an integrated company with the capability to serve patients across multiple transport modalities in the patient’s time of need. The combined company is expected to transport more than five million patients per year through a fleet of air and ground ambulances across 46 states and the District of Columbia.

“We are pleased to have identified a strong partner for AMR,” said Christopher A. Holden, Envision’s president and chief executive. “The Envision leadership team conducted a robust process to review strategic alternatives for AMR. The agreement delivers on our commitment to continue the proud tradition of AMR and enables Envision to focus on its physician-centric strategy and ongoing services, including facility-based provider services, post-acute care and ambulatory surgery.”

A leading provider of physician-led services and post-acute care, and ambulatory surgery services, Envision, through its subsidiary AMR, delivers physician services, primarily in the areas of emergency department and hospitalist services, anesthesiology services, radiology/tele-radiology services, and children’s services to more than 1800 clinical departments.

Headquartered in Dallas, Texas, KKR affiliate AMGH is a leading provider of air and ground ambulance programmes in the US and internationally. AMGH annually transports approximately 100,000 emergent air medical patients and 160,000 ground patient transports through its subsidiaries, which include Med-Trans Corp, Air Evac Life Team and Reach Air Medical Services.

Upon completion of the transaction, the combined company will adopt a new name that reflects the unique capabilities of both AMGH and AMR. Furthermore, operations will continue to be supported from two key leadership locations in Greenwood Village, Colorado and Lewisville, Texas. In addition, the new company’s two divisions will continue to be led by strong leaders – Edward Van Horne will continue as president and chief executive of the AMR division – with extensive experience running medical transportation organisations.

“We are excited to bring together 27,000 AMR team members with 6600 AMGH team members to deliver customised solutions in the communities we support,” said Envision’s president of ambulatory services Randel G. Owen, who will assume the role of president and chief executive of the new combined company. “We believe this partnership will create an exceptional medical transportation company that will allow us to provide seamless, reliable and quality patient care to communities and health systems. The breadth of this combined organisation will enhance our ability to improve patient care in the ever changing healthcare landscape.”

It has also been announced that Michael Preissler, chief financial officer at AMGH, and Thomas Cook, general counsel at AMGH, will continue in the same roles for the combined company.

Guggenheim Securities is acting as exclusive financial adviser and Bass, Berry & Sims is acting as legal adviser to Envision. For AMGH, Barclays is acting as financial adviser and Simpson Thacher & Barlett LLP is acting as legal adviser.

The pending acquisition is subject to regulatory approval and customary closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act, and is expected to close in the fourth quarter of 2017.

Jim Momtazee, chairman of AMGH and head of KKR’s healthcare industry team concluded: “AMGH and AMR are preeminent providers of medical transportation responsible for delivering care to millions of patients every year. We are pleased to be able to bring together these two great companies and look forward to supporting the growth of the combined business.”

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Fraser Tennant

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