(Bloomberg) — Envision Healthcare Holdings Inc. and AmSurg Corp. agreed to merge in an all-stock deal that will create a super-sized U.S. provider of physicians and health care services with a combined enterprise value of $15 billion.
Envision's investors will own about 53 percent of the combined firm, which will be called Envision Healthcare Corp. The exchange ratio is 0.334 AmSurg shares for each Envision share, the companies said in a statement. That implies a valuation of $25.89 for Envision, or about $4.8 billion, based on AmSurg's closing price on Wednesday.
Envision is based in Greenwood Village, Colorado. AmSurg is based in Nashville, Tenn.
The tax-free transaction will create one of the largest U.S. providers of physicians in specialties including emergency, anesthesia, radiology and children's services. AmSurg, which also helps operate ambulatory surgery centers, had tried to combine with another contract-physician company last year, but dropped its bid for Knoxville, Tennessee-based Team Health Holdings Inc. after the target company declined to enter merger talks.
"Amsurg has been very consistent and vocal about their view that they want to get bigger," said Brian Tanquilut, an analyst at New York-based Jefferies. "They feel that there's an advantage to having a pretty wide range of services that they offer."
Gaining leverage
The merger will also help gain leverage in negotiations with health insurers that are undergoing consolidation of their own, with two pending mega-deals by Indianapolis-based Anthem Inc. and Hartford, Connecticut-based Aetna Inc. that would reduce the ranks of the largest U.S. health insurers from five to three.
