UPDATE: Bank Of America Reiterates On Envision Healthcare After Phoenix Deal Closes

In a report published Thursday, Bank of America analyst Kevin Fischbeck reiterated a Buy rating on Envision Healthcare (NYSE: EVHC), and raised the price target from $41.00 to $43.00.

In the report, Bank of America noted, “EVHC said it closed the previously announced acquisition of Phoenix Physicians for $170m. The acquisition is expected to add $125m in revenues with margins comparable to EmCare and we estimate it would be ~$0.03 per share accretive assuming the new 5.125% notes are used to fund a portion of the deal. In addition, EVHC completed a refinancing of all of its 8.125% notes totaling $617m with the net proceeds from the $750m offering of new 5.125% notes, which will reduce annual interest expense by $18m ($0.06/share).

"We are raising our 2014/15/16 cash EPS ests to $1.15/$1.42/$1.63 from $1.13/$1.35/$1.55 for the deal and the refi. We are also raising our PO to $43 from $41. We expect the numbers to continue to move higher, noting the company recently said that the deal pipeline is very robust with over $500m of deals to be done over the next 18 months.”

Envision Healthcare closed on Wednesday at $36.47.