KKR to Acquire Envision Healthcare




On June 11, KKR (KKR) entered into an agreement with Envision Healthcare (EVHC). KKR will acquire Envision Healthcare in an all-cash transaction worth ~$9.9 billion, which includes repaying debt.

According to the terms of the agreement between the two companies, KKR will acquire the outstanding shares of Envision Healthcare’s common stock at $46.00 per share in cash, which reflects an ~32% premium to Envision Healthcare’s volume-weighted average share price from November 1, 2017, when Envision Healthcare announced that it was reviewing the strategic alternative.

KKR already owns Envision Healthcare’s American Medical Response, which is the largest provider of ambulance services in the United States. Last year, KKR acquired American Medical Response for $2.4 billion and merged with KKR’s helicopter ambulance service.

KKR’s acquisition of Envision Healthcare is targeted to be completed by the fourth quarter. The acquisition agreement is subject to regulatory approvals and closing conditions.

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Analysts’ recommendations

Of 15 analysts tracking KKR in June, five analysts recommended a “strong buy,” six recommended a “buy,” and four recommended a “hold” for KKR in June.

On June 11, KKR had consensus 12-month target price of $27, which represents an ~16.1% return on investment in the next 12 months.

Peers’ ratings

Of 14 analysts tracking Blackstone Group (BX), ~93% of the analysts recommended a “buy.” Amongst the 12 analysts tracking Carlyle Group (CG), ~75% of them recommended a “buy.”

On June 11, Blackstone Group and Carlyle Group had consensus 12-month target prices of $39.83 and $27.42, respectively. The target prices represent a return on investment of ~21.1% and 20.8% in the next 12 months.


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