KKR acquires Envision Healthcare for $9.9bn in an all-cash transaction

Private equity firm KKR has announced its $9.9bn acquisition of Envision Healthcare Corporation in an all-cash transaction, further adding to the growing list of healthcare companies which have been involved in mergers or acquisitions this year.

Envision provides physician-led services and post-acute care, as well as ambulatory surgery services. In March 2018, it delivered its services to over 1,800 clinical departments in healthcare facilities in 45 states and the District of Columbia.

The acquisition has been unanimously approved by Envision's Board of Directors, following on from months of exploring all strategic options to enhance shareholder value.

KKR will acquire all outstanding shares of Envision's common stock for $46.00 per share in cash, representing a 32% premium to Envision's volume-weighted average share price (VWAP).

"Envision is a leading provider of physician-led services with a very strong reputation for delivering high-quality, patient-focused care through its network of 25,000 clinical professionals at thousands of hospitals, surgery centres and alternate sites of care across the country," stated Jim Momtazee, Head of KKR's Health Care investment team.

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"We are excited to partner with the outstanding team to help build upon the strong foundation in place and accelerate Envision's growth going forward."

The deal follows on from KKR’s acquisition of Envision’s medical transport arm American Medical Response for $2.4bn, where the firm has since announced a $1.45bn strategic growth fund to increasingly invest in new healthcare ventures at the end of 2017.

"The health care sector has demonstrated strong fundamentals throughout multiple cycles," commented Ali Satvat, KKR Member and Head of KKR's Health Care Strategic Growth investing efforts.

"Significant advances in medical innovation have yielded new products and services for patients, while consolidation and novel approaches to care delivery have the potential to improve clinical outcomes and reduce associated costs.

“These dynamics have created a significant market opportunity and an unmet need for strategic growth capital. We look forward to working with high-growth companies in the health care space for which KKR can be a unique partner in helping them achieve scale."

Shares for Envision rose 2.3% on Monday following on from the news. The company was advised by J.P. Morgan, Evercore and Guggenheim Securities to secure the deal.