Investment firm KKR will acquire Envision Healthcare Corp. in a deal worth nearly $10 billion, the two companies announced on Monday.
The deal, which is valued at $9.9 billion, has been unanimously approved by Envision's board of directors, according to the announcement. The board has spent the last seven months working with independent financial advisers and lawyers to find ways to generate revenue for its shareholders.
Envision, which provides physician staffing services to hospitals, primarily in emergency rooms, and post-acute care services, reached out to 25 potential buyers during that process, according to the announcement.
"After conducting a robust review of the business and competitive landscape, the company's opportunities and challenges and the strategic and financial alternatives available to the company, the board unanimously believes that this transaction will deliver the most value to Envision's shareholders," James D. Shelton, the company's lead independent director, said in the announcement.
In addition to courting potential buyers, Envision's board analyzed the financial merits of continuing to operate independently, examined potential acquisitions and looked at ways to optimize its portfolio without a sale, according to the announcement.
Envision projects that the deal will close in the fourth quarter of this year, according to the announcement. Shareholders will vote on the deal at the company's annual meeting, which is slated for Oct. 1 at the latest.
$KKR to acquire @EnvisionLeads for $46.00 per share in all-cash transaction. Learn more: https://t.co/Xk1EO3M8Zf pic.twitter.com/BCws04mh8O
— KKR & Co. (@KKR_Co) June 11, 2018
Envision has been a prime acquisition target over the past several months. Reuters reported last month that KKR was teaming up with HCA Healthcare to make an offer for Envision, while Bloomberg reported in March that UnitedHealth was interested in purchasing its ambulatory services unit.
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The physician services company has taken heat of late over its emergency department billing practices. Sen. Claire McCaskill, D-Mo., said Envision subsidiary EmCare was "gaming the system" by inflating its ER bills, while UnitedHealthcare terminated its contract with Envision over its "highly questionable" billing practices.
KKR's purchase is another example in a recent string of private equity firms making healthcare acquisitions.
Humana teamed up with TPG Capital and Welsh, Carson, Anderson & Stowe in its planned purchases of both home health and hospice giant Kindred Healthcare and hospice provider Curo Health Services.
In April, ProMedica Health System entered into a joint venture with Welltower, a healthcare real estate and investment trust, to buy HCR ManorCare, the second largest post-acute and long-term care provider in the country. Plus investment firm Elliot Management has proposed a $7 billion cash deal to purchase electronic health record company Athenahealth.