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8-K - 8-K - Envision Healthcare Corp | d606502d8k.htm |
Exhibit 99.1
Envision Healthcare to be Acquired by KKR for $46.00 Per Share in All-Cash Transaction
Sale Follows Comprehensive Review of Strategic Alternatives
32% Premium to VWAP from Announcement of Review of Strategic Alternatives
Represents Enterprise Value of $9.9 Billion
NASHVILLE, TN June 11, 2018 Envision Healthcare Corporation (Envision or the Company) (NYSE: EVHC) today announced it 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 Envisions Board of Directors (the Board), KKR will acquire all of the outstanding shares of Envisions common stock for $46.00 per share in cash, representing a 32% premium to Envisions volume-weighted average share price (VWAP) from November 1, 2017, the day immediately following the Companys 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.1
The agreement represents the culmination of the Boards 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.
James D. Shelton, Envisions Lead Independent Director, commented, After conducting a robust review of the business and competitive landscape, the Companys 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 Envisions shareholders.
Christopher A. Holden, Envisions President, Chief Executive Officer and Director, added, Envisions leadership team including both the Board and management have been singularly focused on driving value for our shareholders and have taken decisive action in furtherance of that goal, including the implementation of a comprehensive operational improvement plan and a robust review of strategic alternatives. Todays announcement reflects the extensive efforts by our team to explore all opportunities to deliver value for our shareholders.
1 | As of 3/31/2018. 2018E EBITDA multiple based on midpoint of Company guidance |
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Envision is a leading provider of physician-led services in a health care system in which physician-patient interactions have a pronounced impact on nearly all health care decisions. Envision has a very strong reputation for delivering high-quality, patient-focused care through its network of 25,000 clinical professionals at thousands of hospitals, surgery centers and alternate sites of care across the country, said Jim Momtazee, Head of KKRs Health Care investment team. We are excited to partner with the outstanding team led by Chris Holden to help build upon the strong foundation in place and accelerate Envisions growth going forward.
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 Companys 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.
KKR will be making the investment primarily from its KKR Americas Fund XII.
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.
About Envision Healthcare Corporation
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 childrens services to more than 1,800 clinical departments in healthcare facilities in 45 states and the District of Columbia. Post-acute care is delivered through an array of clinical professionals and integrated technologies which, when combined, contribute to efficient and effective population health management strategies. The Company owns and operates 261 surgery centers and one surgical hospital in 35 states and the District of Columbia, with medical specialties ranging from gastroenterology to ophthalmology and orthopedics. In total, the Company offers a differentiated suite of clinical solutions on a national scale, creating value for health systems, payors, providers and patients. For additional information, visit www.evhc.net.
About KKR
KKR is a leading global investment firm that manages multiple alternative asset classes, including private equity, growth equity, energy, infrastructure, real estate and credit, with strategic manager partnerships that manage hedge funds. KKR aims to generate attractive investment returns for its fund investors by following a patient and disciplined investment approach, employing world-class people, and driving growth and value creation with KKR portfolio companies. KKR invests its own capital alongside the capital it manages for fund investors and provides financing solutions and investment opportunities through its capital markets business. References to KKRs investments may include the activities of its sponsored funds. For additional information about KKR & Co. L.P. (NYSE: KKR), please visit KKRs website at www.kkr.com and on Twitter @KKR_Co.
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Additional Information and Where to Find It
This communication relates to the proposed merger transaction involving the Company. In connection with the proposed merger, the Company will file relevant materials with the U.S. Securities and Exchange Commission (the SEC), including the Companys proxy statement on Schedule 14A and accompanying definitive WHITE proxy card (the Proxy Statement). This communication is not a substitute for the Proxy Statement or any other document that the Company may file with the SEC or send to its stockholders in connection with the proposed merger. BEFORE MAKING ANY VOTING DECISION, STOCKHOLDERS OF THE COMPANY ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE PROXY STATEMENT, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain the documents (when available) free of charge at the SECs website, http://www.sec.gov, and the Companys website, www.evhc.net.
Participants in the Solicitation
The Company and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the holders of Company common stock in respect of the proposed transaction. Information about the directors and executive officers of the Company is set forth in the Companys Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 1, 2018, as amended by the Companys Annual Report on Form 10-K/A filed with the SEC on April 30, 2018. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the Proxy Statement and other relevant materials to be filed with the SEC in respect of the proposed transaction.
Forward-Looking Statements
Certain statements and information in this communication may be deemed to be forward-looking statements within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Forward-looking statements may include, but are not limited to, statements relating to the proposed transaction, the Companys financial and operating objectives, plans and strategies, industry trends, and all statements (other than statements of historical fact) that address activities, events or developments that the Company intends, expects, projects, believes or anticipates will or may occur in the future. These statements are often characterized by terminology such as believe, hope, may, anticipate, should, intend, plan, will, expect, estimate, project, positioned, strategy and similar expressions, and are based on assumptions and assessments made by the Companys management in light of their experience and their perception of historical trends, current conditions, expected future developments, and other factors they believe to be appropriate. Any forward-looking statements in this communication are made as of the date hereof, and the Company undertakes no duty to update or revise any such statements, whether as a result of new information, future events or otherwise. Forward-looking statements are not guarantees of future performance. Whether actual results will conform to expectations and predictions is subject to known and unknown risks and uncertainties, including: (i) risks and uncertainties discussed in the reports and other documents that the Company files with the SEC; (ii) risks related to the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement; (iii) the failure to obtain Company stockholder approval of the transaction or required regulatory approvals or the failure to satisfy any of the other conditions to the completion of the transaction; (iv) the effect of the announcement of the transaction on the ability of the Company to retain and hire key personnel and maintain relationships with its customers, suppliers, partners and others with whom it does business, or on its operating results and businesses generally; (v) risks associated with the disruption of managements attention from ongoing business operations due to the transaction; (vi) the ability to meet expectations regarding the
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timing and completion of the transaction; (vii) general economic, market, or business conditions; (viii) the impact of legislative or regulatory changes, such as changes to the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010; (ix) changes in governmental reimbursement programs; (x) decreases in revenue and profit margin under fee-for-service contracts due to changes in volume, payor mix and reimbursement rates; (xi) the loss of existing contracts; and (xii) other circumstances beyond the Companys control.
CONTACTS
Envision:
Envision Healthcare Corporation
Bob Kneeley, 303-495-1245
Vice President, Investor Relations
bob.kneeley@evhc.net
or
Jared Levy / Jacob Crows / Warren Rizzi
Sard Verbinnen & Co
(212) 687-8080
Envision-SVC@sardverb.com
KKR:
Kristi Huller / Cara Major
(212) 750-8300
media@kkr.com
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