Envision Healthcare downgraded to hold at Canaccord Genuity

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Envision Healthcare’s stock surges after KKR buyout deal that values company at $5.6 billion

Shares of Envision Healthcare Corp. surged 2.5% in premarket trade Monday, after the provider of physician-led services and post-acute care said it agreed to be acquired by KKR & Co. LP in a deal valued at $9.9 billion, including debt. Under terms of the deal, KKR will pay $46 in cash for each Envision share outstanding, a 5.4% premium to Friday’s closing price of $43.64. That would give Envision a market capitalization of about $5.57 billion. Envision said the deal follows a review of strategic alternatives to enhance shareholder value. The deal is expected to close in the fourth quarter of 2018. “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,” said James Shelton, Envision lead independent director. Envision’s stock had slumped 22.3% over the past 12 months through Friday, while KKR shares have rallied 21.2%, the SPDR Health Care Select Sector ETF has gained 9.7% and the S&P 500 has climbed 14.3%.

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