Envision Healthcare Corporation has announced a deal that will see Air Medical Group Holdings (AMGH) join forces with American Medical Response (AMR). Envision said on 8 August that it has entered into a definitive agreement with an entity controlled by funds affiliated with KKR under which KKR portfolio company AMGH and Envision’s medical transportation subsidiary AMR will combine to create a new medical transportation company. The transaction will be structured as a cash acquisition of AMR valued at US$2.4 billion, said Envision.
In a statement, Envision said the combination of AMGH and AMR will create an integrated medical transportation company with the capability to serve patients across multiple transport modalities in the patient’s time of need. “The combined company is expected to transport more than five million patients per year through a fleet of air and ground ambulances across 46 states and the District of Columbia,” said the firm.
Christopher A. Holden, Envision’s president and CEO, commented: “We are pleased to have identified a strong partner for AMR. The Envision leadership team conducted a robust process to review strategic alternatives for AMR. The agreement delivers on our commitment to continue the proud tradition of AMR and enables Envision to focus on its physician-centric strategy and ongoing services, including facility-based provider services, post-acute care and ambulatory surgery.”
Jim Momtazee, AMGH chairman and head of KKR’s healthcare industry team, said: “AMGH and AMR are preeminent providers of medical transportation responsible for delivering care to millions of patients every year. We are pleased to be able to bring together these two great companies and look forward to supporting the growth of the combined business.”
Randel G. Owen, Envision’s president of ambulatory services, will assume the role of president and CEO of the new combined company. He commented: “We are excited to bring together 27,000 AMR team members with 6,600 AMGH team members to deliver customised solutions in the communities we support. We believe this partnership will create an exceptional medical transportation company that will allow us to provide seamless, reliable and quality patient care to communities and health systems. The breadth of this combined organisation will enhance our ability to improve patient care in the ever changing healthcare landscape.”
After the transaction is completed, the combined company will adopt a new name, said Envision, while AMR and AMGH will continue to support operations from two key leadership locations in Greenwood Village, Colorado, and Lewisville, Texas.
Fred Buttrell, who will continue as president and CEO of the air medical division, said: “AMGH and AMR have worked together in many markets as well as disaster response and will have more integrated service offerings in the future for patients, health systems and regions. Together we will preserve the best attributes of each for the benefit of all stakeholders focusing on local market solutions. Employees will benefit from more opportunities as we expand our footprint into underserved communities.”
Edward Van Horne will maintain his role as president and CEO of the AMR division. He said: “Our partnership with AMGH will enable us to further expand our one-source solutions for health systems and communities. We can also continue to grow our innovative services in managed transportation, specialty fire services, mobile integrated healthcare, event medical, federal disaster response and ambulance services across the US.”
The pending acquisition is subject to regulatory approval and customary closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act, and is expected to close in the fourth quarter of 2017, said Envision. Preferred equity financing for the transaction is being provided by KKR primarily through its North America XI Fund and by Koch Equity Development LLC (KED), the investment and acquisition subsidiary of Koch Industries, Inc.
In April, AMGH announced it had agreed to acquire Air Medical Resource Group (AMRG).