U.S. hospital operator HCA Healthcare in addition to private-equity firm KKR have joined forces to make an offer for U.S. physician services provider Envision Healthcare, people familiar with the matter said on Friday.
The move is usually aimed at giving HCA in addition to KKR an edge over buyout firms of which are also pursuing Envision, which features a market capitalization of $5.1 billion in addition to long-term debt of $4.6 billion, the sources said.
HCA, which features a market capitalization of $36 billion in addition to long-term debt of $31.6 billion, wants to acquire Envision’s AmSurg ambulatory surgery business, with KKR taking the over the remainder, according to the sources.
Nashville-based Envision has asked potential acquirers to submit final offers later This specific month, the sources said. some other private-equity firms competing for Envision include a consortium of Carlyle Group in addition to TPG Global, the sources added.
The sources asked not to be identified because the matter is usually confidential. KKR, Carlyle, in addition to TPG declined to comment. Envision in addition to HCA did not immediately respond to requests for comment.
Envision announced last year This specific was reviewing a range of strategic alternatives after reporting disappointing third-quarter earnings, which This specific attributed partly to the effects of hurricanes Harvey in addition to Irma as well as a slowdown inside growth of patient demand.
Last year, Envision agreed to sell its ambulance unit, AMR, to Air Medical, a medical helicopter business owned by KKR, for $2.4 billion.
The year prior, This specific merged with AmSurg in an all-stock deal of which valued the combined companies at the time at around $10 billion. HCA’s in addition to KKR’s bid could reverse of which combination.
A sale of Envision could be the latest in a spate of mergers in addition to acquisitions activity among physician networks, a business of which has struggled in recent years to adapt to modifications in how U.S. health insurers reimburse providers.
Federal reimbursement programs such as Medicare in addition to Medicaid, for example, have been trying to shift to a “value-based” payment product, whereby providers sometimes receive fixed payments to encourage them to control costs.
Last year, U.S. kidney care-provider DaVita agreed to sell its medical group business, Davita Medical Group, to UnitedHealth for $4.9 billion.
Envision’s rival MEDNAX has also been exploring strategic alternatives, including a sale, Reuters has reported.
In 2016, buyout firm Blackstone acquired hospital staffing provider Team Health Holdings for $6.1 billion.