Envision Healthcare Holdings Inc. (Greenwood Village CO) and AmSurg Corp. (Nashville TN) agreed to merge, in a deal that will create a company providing a range of hospital-related services worth some $10 billion.
The all-stock deal has a fixed exchange ratio of 0.334 AmSurg share per Envision share, the companies confirmed in a statement. Envision shareholders will own about 53% of the combined company, which is to be named Envision Healthcare Corp.
It will have dual headquarters in Nashville and Greenwood Village, CO. The combined company will be led by Envision Chairman and CEO William Sanger, who will become executive chairman, and AmSurg CEO Christopher Holden, who will maintain that role.
The new board will have 14 directors, split evenly between their current board members, including Messrs. Sanger and Holden. AmSurg provides outsourced physician services to hospitals and others.
It is also a big player in so-called ambulatory surgery, with about 250 facilities performing procedures that don’t require an overnight stay. Envision also provides physician services such as emergency care, anesthesiology and surgery, in addition to ambulance and other medical-transportation services.
The companies together had revenue of more than $8.5 billion in the 12 months ended in March. The companies said they would reap $100 million of cost and other benefits from the combination within three years.
Consolidation waves have swept through the hospital and health-insurance industries in recent years, part of a broader surge in deal making. That has put pressure on companies like AmSurg to seek tie-ups that will enable them to maintain size and scope needed to keep up with customers, rivals and suppliers.
Last year, AmSurg made an unsolicited approach to combine with rival Team Health Holdings Inc. (Knoxville TN). AmSurg withdrew its offer after Team Health said it was too low. In 2014, AmSurg bought physician-outsourcing service provider Sheridan Healthcare Inc. for about $2.3 billion. Envision shares closed the week off 6% at $26.04, while AmSurg slipped 2% to $78.76.
Monday, June 20, 2016 / Vol. 24 / No. 24