TeamHealth to be sold to Blackstone for $6.1bn

January 2017 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

In a transaction valued at approximately $6.1bn, physician services organistion TeamHealth Holdings, Inc. is to be acquired by funds affiliated with global asset manager Blackstone.

Under the terms of the definitive agreement, Blackstone and its co-investors will acquire all of

the outstanding shares of TeamHealth common stock for $43.50 per share in cash.

The merger agreement includes a ‘go-shop’ period, during which TeamHealth and its board of directors may actively solicit, receive, evaluate and potentially enter negotiations with parties that offer alternative proposals during a 40-day period following the execution date of the definitive agreement.

With 19,000 affiliated physicians and advanced practice clinicians, TeamHealth offers outsourced emergency medicine, hospital medicine, critical care, anesthesiology, orthopedic hospitalist, acute care surgery, obstetrics and gynecology hospitalist, ambulatory care, post-acute care and medical call centre solutions to approximately 3400 acute and post-acute facilities and physician groups nationwide.

“We are pleased to reach this agreement with Blackstone, which maximises value for all TeamHealth stockholders,” said Leif Murphy, president and chief executive of TeamHealth. “We remain committed to delivering the highest quality patient care and supporting our affiliated clinicians, hospital and post-acute partners.

“Blackstone is focused on working closely with TeamHealth to achieve our strategic objectives and drive innovation and operational excellence in the context of the evolving US healthcare marketplace. We continue to believe that TeamHealth is uniquely positioned to leverage our national scale and functional expertise to drive high quality patient care, operational efficiencies and physician satisfaction in hospital-based and post-acute settings.”

Having been unanimously approved by its board of directors, TeamHealth is expected to hold a meeting of stockholders to consider and vote on the proposed merger and merger agreement.

“We are thrilled to have the opportunity to invest in TeamHealth and once again partner with such an experienced management team and high quality business,” said Neil Simpkins, a senior managing director at Blackstone. We look forward to supporting TeamHealth during the next phase of its development.”

One of the world’s leading investment firms, Blackstone’s asset management businesses have over $360bn in assets under management, including investment vehicles focused on private equity, real estate, public debt and equity, non-investment grade credit, real assets and secondary funds, all on a global basis.

As a prior owner of TeamHealth, Blackstone knows both the US healthcare industry and TeamHealth’s purpose, to perfect physicians’ ability to practice medicine, well.

“Blackstone is one of the world’s leading investment firms and will be a tremendous capital partner to help accelerate TeamHealth’s growth priorities and fund our long-term initiatives as we continue to execute on our strategic priorities,” said Lynn Massingale, managing director, co-founder and executive chairman of TeamHealth. “As a prior owner of TeamHealth, Blackstone knows TeamHealth and the US healthcare industry well and will work with us to create value for all our stakeholders over the long-term.

Acting as lead financial adviser for TeamHealth is Goldman, Sachs & Co while Citi is acting as co-financial adviser. Simpson Thacher & Bartlett LLP is acting as TeamHealth’s legal counsel. For Blackstone, BofA Merrill Lynch is acting as an adviser on the transaction and Kirkland & Ellis LLP and Ropes & Gray LLP are acting as the investment firm’s legal counsel.

The TeamHealth/Blackstone transaction – which is subject to the receipt of TeamHealth stockholder approval, regulatory approvals and other customary closing conditions – is expected to close in the first quarter of 2017.

Ms Massingale concluded: “We are very proud of our team and believe this investment is a testament to the underlying strength of the organisation and the thousands of skilled and dedicated clinicians who choose to be part of TeamHealth.”

Fraser Tennant