AmSurg Corp. (NASDAQ: AMSG) offered to buy Team Health Holdings Inc. (NYSE: TMH) in a stock and cash transaction worth about $5.17 billion to add to its contract-physician operations.
The proposal values Team Health at $71.47 a share based on AmSurg’s closing stock price yesterday, for a total enterprise value of about $7.8 billion, AmSurg said in a statement. The offer represents a premium of 36 percent to Team Health shareholders, who would get a cash consideration of $11.49 per share, it said in a statement Tuesday.
The companies met last month when AmSurg proposed a deal and was rejected, said AmSurg Chief Executive Officer Christopher Holden. “We are disappointed to learn that you chose not to engage with us based on what appears to be a very cursory analysis of our specific proposal and key deal terms,” Holden said in a letter to Team Health’s board.
There have been a handful of physician group deals in the middle-market in 2015. For instance, AmSurg Corp.'s (Nasdaq: AMSG) physician services unit, Sheridan, is adding Radiology Associates of Hollywood PA; IPC Healthcare Inc. (Nasdaq: IPCM) is purchasing Arcwell Medical and Innovative PsychiatriCare; and Mednax Inc. (NYSE: MD) is buying Millennium Anesthesia Care.
Team Health, based in Knoxville, Tennessee, is a hospital staffing company that provides nurses, doctors and other clinical aides. AmSurg helps run clinics and surgery centers, working with physician practices. Together they represent about 1,200 health-care facilities and 20,000 clinical workers, AmSurg said.
The deal would create $200 million to $290 million in synergies, according to Nashville, Tennessee-based AmSurg.
Team Health shares rose 28 percent to $67 at 7:26 a.m. in New York trading before the market opened. The stock has fallen 8.7 percent this year as of Monday’s close.
“We believe strongly in this combination and hope Team Health’s Board will engage with us promptly to reach an agreed transaction,” Holden said.
A voicemail message left with a Team Health representative was not immediately returned.
The offer was first reported by the Wall Street Journal.
--With assistance from Tom Lavell in Frankfurt.