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June 11, 2018updated 28 Mar 2022 9:20am

KKR signs agreement to acquire Envision for $5.5bn

Private equity firm KKR & Co has signed a definitive agreement to purchase Envision Healthcare, a US physician services provider, for around $5.5bn.

Private equity firm KKR & Co has signed a definitive agreement to purchase Envision Healthcare, a US physician services provider, for around $5.5bn.

The private equity firm would pay $46 per share in cash to acquire Envision.

The agreement has been unanimously approved by Envision’s board of directors.

This deal comes within the two weeks of KKR’s announcement to buy US business software company BMC Software for around $8.5bn, which includes debt, reported Reuters.

This would be the largest purchase of the private equity firm since the global financial crisis of 2008.

The transaction is expected to complete in the fourth quarter of 2018, after meeting customary closing conditions and getting regulatory approvals.

Envision lead independent director James D Shelton said: “After conducting a robust review of the business and competitive landscape, the Company’s 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 Envision’s shareholders.”

In May, Reuters reported that KKR teamed up with with US hospital operator HCA Healthcare to provide buyout offer for Envision, with an aim to gain an edge over other buyout firms that were similarly interested in Envision acquisition.

A consortium of Carlyle Group  and TPG Global were other private equity firms competing for Envision acquisition, sources told Reuters last month.

In 2017, Envision stated that it was exploring strategic alternatives after it posted disappointing third-quarter earnings, partly due to the impacts of Harvey and Irma hurricanes, as well as tepid growth in patient demand.

In May this year, KKR had also agreed to buy BMC from private equity companies Bain Capital and Golden Gate Capital, which acquired BMC five years ago for $6.9bn.

Last year, KKR was successful in fundraising, with its fund closings including an almost $14bn North America private equity fund and a $1.45bn fund on healthcare.

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