Some Analysts Initially Positive On Envision-AmSurg Merger

Envision Healthcare Holdings Inc EVHC and Amsurg Corp AMSG have agreed to merge, which would create an $8.5B revenue entity. Canaccord Genuity’s Richard Close maintained a Buy rating for Envision, with a price target of $32, saying that the initial views on the merger were positive, as it would position the company as “the clear leader in outsourced and ambulatory healthcare services.”

Merger Details

The merger is fixed at 0.334 AmSurg share per Envision share. If the merger is completed, Envision’s shareholders would own 53 percent of the combined company. The merger is expected to be EPS accretive in 2017 and synergies are anticipated at $100M over three years through costs savings and cross-selling opportunities.

Envision CEO Bill Sanger would become Executive Chairman, Amsurg CEO Chris Holden would take on the role of CEO of the combined company. Amsurg CFO Claire Gulmi will become CFO of the combined entity, while Envision CFO Randy Owen will assume the role of President of Ambulatory Services.

“EVHC's rapidly growing Evolution Health extends the continuum of care into the post-acute market thus providing a near end-to-end services company which will be uniquely positioned for the shift to value-based care and population health management,” analyst Richard Close wrote.