KKR & Co. L.P. Unit (NYSE:KKR) Draws Closer To The Conclusion Of Its Envision Healthcare Corp (NYSE:EVHC) Acquisition

The sources revealed that the value of the acquisition deal between the two companies will be $5.5 billion which is equivalent to $46 per share. This makes it one of the largest leveraged buyouts to take place recently. The announcement also comes months after Envision Healthcare announced that it was open to a buyout after being plagued by controversy due to its billing practices.

Envision Healthcare is based in Nashville, Tennessee and it offers physician services to healthcare facilities including hospitals. The company announced a strategic review in the second half of 2017, revealing that it was open to the idea of a buyout. The sources who sought anonymity due to the private nature of the deal also revealed that a deal will most likely be announced this week.

The value of the deal

The acquisition of Envision Healthcare by KKR will be one of the biggest acquisition deals involving a company from the private equity sector. It also highlights Wall Street’s growing involvement in the healthcare sector. The price of the acquisition will be a 5 percent premium on Envision Healthcare’s closing price which was reported at $43.64 on Friday. The price also represents a 70 percent surge in price compared to the value of the company’s stock ever since it announced the review.

Despite the surge in the value of the stock as a result of the announcement last year, Envision shares have also dropped by a significant margin due to the controversy over its healthcare billing services. The value of the acquisition will be roughly 10 million if the debt is included, making it one of the biggest private-equity firm buyouts to take place recently. However, this is not the first time that KKR and Envision have done business together. The private equity firm struck a deal in August last year to acquire Envision Healthcare’s ambulance business through its subsidiary, company Air Medical Group Holdings.

KKR is expanding its portfolio

The report about KKR possibly acquiring Envision Healthcare highlights the private equity company’s decision to expand its portfolio. Just a few weeks it announced plans to acquire BMC Software Inc. for roughly 8.3 million. BMC Software is currently owned by private equity firms Golden Gate Capital, and Bain Capital, whereas the acquisition, will also include debt.

“Our customers can expect the BMC team to remain focused on providing innovative solutions and services with our expanding ecosystem of partners to help them succeed across changing enterprise environments. We are excited to embark on our next chapter with KKR as our partner,” stated BMC CEO, Peter Leav.

KKR is also making other investments in the healthcare industry and this means it has been establishing long-term growth opportunities within the health sector. Further details pertaining its acquisition of Envision Healthcare are expected to be revealed during the official announcement.