Last fall, AmSurg Corp. (NASDAQ: AMSG) made an unsolicited bid for TeamHealth Holdings (NYSE: TMH), to the tune of $7.8 billion. At the time, TeamHealth was working its way through its own merger with IPC Healthcare, for $1.6 billion. It snubbed AmSurg’s offer as too low, and went on to complete its IPC acquisition on November 23, 2015.
Analysts who follow the Physician Medical Group sector generally praised AmSurg’s offer from a strategic perspective, as it would create one of the largest national providers of outsourced physician services to health systems. Alas, AmSurg withdrew its offer on November 2.
For the record, AmSurg provides ambulatory and physician services in the United States through its Physician Services division, Sheridan. It operates 257 ambulatory surgery centers in 34 states, and provides physician services to 450 healthcare facilities in 29 states.
AmSurg kept looking, and found a willing partner in Envision Health Holdings (NYSE: EVHC), which provides physician-led outsourced medical services to consumers, hospitals, healthcare systems, health plans and government entities The two companies announced a definitive agreement to merge on June 14, 2016, to the tune of $6.7 billion. The merger is an all-stock transaction at a fixed exchange ratio of 0.344 AmSurg shares per Envision share, plus $2.36 billion of debt. EVHC shareholders will own 53% and AMSG shareholders will own 47%.
The merger brings together two leading, complementary companies to form one of the nation’s largest provider organizations. The combined company will be named Envision Healthcare Corporation, and will trade on the New York Stock Exchange under the ticker symbol EVHC. The two companies had combined revenue of $8.5 billion and adjusted EBITDA of $1.1 billion for the 12-months ended March 31, 2016. The CEO of AmSurg, Chris Holden, will serve as CEO of the combined company.