Blackstone to acquire TeamHealth Holdings for $6.1 billion

News Hour:

TeamHealth Holdings Inc on Monday said private equity firm Blackstone Group LP would buy it for $6.1 billion, in a deal meant to help the U.S. hospital staffing company better cope with pricing pressure during a wave of consolidation.

TeamHealth has been the target of activist investor Jana Partners LLC since February, when the hedge fund disclosed an 8 percent stake in the company. Jana has agreed to vote in favor of the Blackstone transaction, TeamHealth said, reports Reuters.

Blackstone’s purchase price of $43.50 per share is a 33 percent premium to TeamHealth’s closing stock price on Oct. 3, the last trading day before reports surfaced that the companies were in talks.

103992250-gettyimages-493427906-1910x1000

TeamHealth was trading at $42.80 on Monday, up 16.3 percent from Friday’s close, while Blackstone dipped 0.5 percent to $25.38.

The deal, to close in the first quarter of 2017, comes less than two months after TeamHealth named industry veteran Leif Murphy as chief executive officer, replacing retiring Michael Snow.

The U.S. physician services industry has been rapidly consolidating to counter rising administrative costs from President Barack Obama’s Affordable Care Act and the desire to offer a broader array of services to hospitals.

Rival Amsurg Corp, whose $5 billion bid for TeamHealth was snubbed last year, agreed in June to merge with Envision Healthcare Holdings Inc.

Following its rejection of Amsurg’s offer, TeamHealth in November acquired smaller peer IPC Healthcare Inc for $1.6 billion.

TeamHealth, which offers outsourcing services, including emergency medicine, anesthesiology and ambulatory care, to hospitals and physician groups, had outstanding debt of $2.47 billion as of June 30.

Reuters earlier this month reported Blackstone was the lead bidder for the Knoxville, Tennessee-based company, citing sources.

TeamHealth agreed in March to add three directors to its board following a deal with Jana, which had criticized its “missteps in critical areas including capital allocation, strategy and governance.”

Murphy most recently was executive vice president of LifePoint Health Inc, which owns and operates U.S. hospitals, physician practices and outpatient centers.

Goldman Sachs is the lead financial adviser and Citi the co-financial adviser to TeamHealth, while Simpson Thacher & Bartlett is the legal counsel.

BofA Merrill Lynch is Blackstone’s financial adviser, while Kirkland & Ellis LLP and Ropes & Gray LLP are its legal counsel.

Avatar

This article has been posted by a News Hour Correspondent. For queries, please contact through [email protected]
No Comments

Translate this News

Join the Facebook Group

Click here to join the Facebook group of News Hour

Popular Posts

Advertisement

News of the Month

October 2016
S M T W T F S
« Sep   Nov »
 1
2345678
9101112131415
16171819202122
23242526272829
3031  
Scroll Up
%d bloggers like this: