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KKR to pay USD 10bn for Envision
Posted on Tuesday, 12 June 2018 10:25
Private equity giant KKR & Co has prevailed in an auction for Envision Healthcare in a deal that values the provider of physicians to hospitals in the US at USD 9.90 billion, including debt.

Under the terms of the transaction, the buyout group is paying USD 46.00 per share in cash, representing a 32.0 per cent premium to the volume-weighted average stock price from 1st November 2017, prior to the target’s first announcement that it is exploring options.

This values the cash-portion of the deal at USD 5.56 billion, or a multiple of 10.9x trailing 12-month adjusted earnings before interest, taxes, depreciation and amortisation.

Envision began exploring alternatives to generate shareholder value, including potential acquisitions, a sale, or a portfolio optimisation in November.

The process led to the company reaching out to some 25 potential buyers, with Bloomberg reporting that Carlyle Group, Onex and Clayton Dubilier & Rice were among those said to be interested.

Envision’s board has determined that KKR’s offer represents the best opportunity to maximise shareholder value.

The business claims to be a leader in physician-led services in a health care system, providing physician-patient interactions that assist in early health-care decisions.

Closing of the transaction is slated for the fourth quarter of 2018, subject to the usual raft of regulatory approvals, with shareholders to be presented with the deal at the group’s 2018 annual meeting to be held no later than 1st October 2018.

As a result of being taken private by KKR, at completion, Envision will cease trading on the New York Stock Exchange after five years of being a public company following its USD 966.00 million initial public offering in 2013.

KKR had USD 176.00 billion in assets under management and had USD 1.88 billion in cash and cash equivalents as of 31st March 2018.

Investigations have already begun regarding the deal, with Johnson Fistel and Rowley Law each saying they are examining if Envision’s board breached its fiduciary duty in connection with the proposed acquisition.

Zephyr, the M&A database published by Bureau van Dijk, shows there have been 903 deals targeting health care and social assistance providers announced worldwide since the start of 2018.

The largest such transaction is KKR’s agreement to acquire Envision for USD 9.90 billion. This is followed by HCP Mezzanine Lender paying USD 7.10 billion for HCR Manor Care.

© Zephus Ltd