KKR’s $9.9 Billion Acquisition of Envision Healthcare

J.P. Morgan Securities LLC, Evercore and Guggenheim Securities LLC are serving as financial advisors and Wachtell, Lipton, Rosen & Katz and Bass, Berry & Sims are serving as legal counsel to Envision. Simpson Thacher & Bartlett LLP is acting as legal counsel to KKR. Fully committed debt financing for the transaction will be provided by Citigroup Global Markets, Credit Suisse, Morgan Stanley, Barclays, Goldman Sachs, Jefferies, UBS Investment Bank, RBC Capital Markets, HSBC, Mizuho, and KKR Capital Markets.

Envision Healthcare Corporation (NYSE: EVHC) has entered into a definitive agreement to be acquired by global investment firm KKR in an all-cash transaction for approximately $9.9 billion, including the assumption or repayment of debt. Under the terms of the agreement, which has been unanimously approved by Envision’s Board of Directors (the “Board”), KKR will acquire all of the 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) from November 1, 2017, the day immediately following the Company’s first announcement that it was reviewing strategic alternatives. The transaction price represents a multiple of 10.9x trailing 12 months Adjusted EBITDA and 10.1x 2018 anticipated Adjusted EBITDA.

The agreement represents the culmination of the Board’s comprehensive review of strategic alternatives to enhance shareholder value. During the last seven months, the Board, with the assistance of three independent financial advisors and legal counsel, examined a full range of options to generate shareholder value, including capital structure alternatives, potential acquisitions, portfolio optimization, a potential sale of the whole company, and continued operation as a standalone business. The Board oversaw an extensive process that involved outreach to 25 potential buyers, including financial sponsors and strategic entities, and invited proposals for all or parts of the business. After consideration of the opportunities, risks and uncertainties facing the Company and the broader sector, as well as the alternatives available to the Company, the Board determined that the KKR proposal presented the best opportunity to maximize value for shareholders.

The completion of the transaction, which is targeted for the fourth quarter of 2018, is subject to customary closing conditions and regulatory approvals. Envision intends to present the proposed transaction to its shareholders for approval at the Company’s 2018 Annual Meeting, which will be scheduled as soon as practicable following the filing and review of proxy materials. The Company intends to hold its Annual Meeting no later than October 1, 2018. Upon the completion of the transaction, Envision will become a private company, and its common stock will no longer be traded on the New York Stock Exchange.

Envision Healthcare Corporation is a leading provider of physician-led services and post-acute care, and ambulatory surgery services. At March 31, 2018, we delivered physician services, primarily in the areas of emergency department and hospitalist services, anesthesiology services, radiology/tele-radiology services, and children’s services to more than 1,800 clinical departments in healthcare facilities in 45 states and the District of Columbia.

The Simpson Thacher team includes Marni Lerner (Picture), Michael T. Holick, Michael Reeves, Alex Cushman and Jiarui Li (M&A); Adam Shapiro, Ed Bersuder and Ronnie Lim (Credit); Richard Fenyes (Capital Markets); Tristan Brown, Alisa Tschorke and Adam Cohen (Executive Compensation and Employee Benefits); Rob Holo, Sophie Staples and Nicole Humphrey (Tax); Lori Lesser and Amber Harezlak (Intellectual Property); Krista McManus (Real Estate); and Adeeb Fadil and Noreen Lavan (Environmental). Summer Associate Molly Nelson also provided assistance.

Bass, Berry & Sims advised Envision Healthcare Corporation with a team including Greg Everett, Curtis L. Fisher, Brad L. Hart, J. James Jenkins, Jr., Oliver H. Peglow, Frank M. Pellegrino, Danielle M. Sloane, Lucas Ross Smith, Kurt Vincent and Tyler H. Wadlington

Involved fees earner: Greg Everett – Bass Berry & Sims; Brad Hart – Bass Berry & Sims; James Jenkins – Bass Berry & Sims; Oliver H. Peglow – Bass Berry & Sims; Frank Pellegrino – Bass Berry & Sims; Kurt Vincent – Bass Berry & Sims; Tyler Wadlington – Bass Berry & Sims; Curtis Fisher – Bass Berry & Sims; Danielle Sloane – Bass Berry & Sims; Lucas Ross Smith – Bass Berry & Sims; Marni Lerner – Simpson Thacher & Bartlett; Michael Holick – Simpson Thacher & Bartlett; Michael Reeves – Simpson Thacher & Bartlett; Alexander Cushman – Simpson Thacher & Bartlett; Jiarui Li – Simpson Thacher & Bartlett; Adam Shapiro – Simpson Thacher & Bartlett; Edward Bersuder – Simpson Thacher & Bartlett; Richard Fenyes – Simpson Thacher & Bartlett; Tristan Brown – Simpson Thacher & Bartlett; Alisa Tschorke – Simpson Thacher & Bartlett; Adam Cohen – Simpson Thacher & Bartlett; Robert Holo – Simpson Thacher & Bartlett; Sophie Staples – Simpson Thacher & Bartlett; Nicole Humphrey – Simpson Thacher & Bartlett; Lori Lesser – Simpson Thacher & Bartlett; Amber Harezlak – Simpson Thacher & Bartlett; Krista McManus – Simpson Thacher & Bartlett; Adeeb Fadil – Simpson Thacher & Bartlett; Noreen Lavan – Simpson Thacher & Bartlett;

Law Firms: Bass Berry & Sims; Simpson Thacher & Bartlett;

Clients: KKR; Envision Healthcare Corporation;


Author: Ambrogio Visconti