Kidney care specialist DaVita (NYSE: DVA) made good on its statement that it was exploring strategic alternatives for its DaVita Medical Group (DMG). It found a buyer in UnitedHealth Group’s (NYSE: UNH) Optum, which agreed to pay $4.9 billion for DMG, the highest publicly announced price it has paid for a physician group.
In January, Optum announced its take-out of Surgical Care Affiliates, Inc. (NASDAQ: SCAI) for $3.2 billion. The company partners with health plans, medical groups and health systems to develop and optimize surgical centers. At the time of the announcement, it operated 205 surgical facilities, including ambulatory surgery centers and surgical hospitals, in partnership with 3,000 physicians.
DaVita formed its physician division with the $4.2 billion acquisition of HealthCare Partners, LLC in May 2012. At the time the company operated medical groups (700 physicians) and physician networks (1,800 physicians). Today, it includes 35 urgent care centers and six outpatient surgery centers.
DaVita was still in acquisition mode, to the last minute. On November 28, it announced its acquisition of Northwest Physicians Network, for an undisclosed price. The Tacoma, Washington-based group has more than 1,000 primary care and specialty care physicians.
Other companies in this space are feeling some heat from activist shareholders. They’ve been active in the Hospital sector this year, and their influence has spurred a plethora of divestitures. There’s a new crop in the
Physician Medical Group sector, as Elliott Management Corp. is now targeting MEDNAX Inc. (NYSE: MD), a steady acquirer of pediatric, anesthesia and radiology practices with a market cap of $4.7 billion, but debt of nearly $1.8 billion.
Elliott disclosed a 7% stake in the company, and several private equity firms have expressed interest in MEDNAX, according to a Reuters exclusive on December 1. Bank of America Corp. is working with MEDNAX to field the interested parties, which include Carlyle Group LP (NASDAQ: CG).
Carlyle is also kicking the tires on Envision Healthcare Corp. (NYSE: EVHC), the surviving entity of the $6.7 billion merger between AmSurg Corp. and Envision Healthcare Holdings announced in June 2016. A group including the Canadian acquirer Onex Corp. (TSE: ONEX) has also expressed interest in Envision (market cap $3.7 billion). Onex reportedly has formed a consortium with Clayton Dubilier & Rice and Hellman & Friedman to bid for Envision.
