Amsurg Agrees to Buy Sheridan Healthcare for $2.35 Billion

May 29, 2014 4:11 pm ET

(Updates shares in fifth paragraph.)

May 29 (Bloomberg) -- Amsurg Corp., the operator of 242 U.S. ambulatory surgery centers, agreed to buy Sheridan Healthcare for $2.35 billion to add the country’s biggest provider of anesthesia services. Amsurg shares soared.

The cash-and-stock deal, agreed upon by both boards, will immediately contribute to Amsurg’s adjusted earnings per share, the Nashville, Tennessee-based company said today in a statement. Sheridan, based in Sunrise, Florida, is owned by private-equity firm Hellman & Friedman LLC.

The acquisition will give Amsurg a “leadership position” in anesthesia, children’s services, emergency medicine services and radiology provided to hospitals and medical facilities on an outsourced basis, according to the statement. Sheridan will help Amsurg compete with Knoxville, Tennessee-based Team Health Holdings Inc., closely held EmCare Inc., and possibly hospitals as well, said Sheryl Skolnick of CRT Capital Group LLC in Stamford, Connecticut, in an e-mail.

“We’re not only growing faster, we now have more ways to grow,” Amsurg Chief Executive Officer Christopher Holden said on a conference call with investors today.

Amsurg rose 6.9 percent to close at $45.74 in New York, its biggest one-day gain since October 2012. The stock has gained 27 percent in the past 12 months.

Significant Shareholder

Hellman & Friedman will be an “ongoing significant shareholder of the combined company,” Managing Director Allen R. Thorpe said in the statement. The deal is expected to close in the third quarter.

Sheridan investors will be issued Amsurg shares with a current value of about $615 million, the companies said. Amsurg may replace a “substantial portion” of the equity consideration with cash.

Darren Lehrich, an analyst with Deutsche Bank Securities Inc., said the deal marks a “significant departure” from Amsurg’s core model of ambulatory surgery centers.

Sheridan operates in 25 states and employs more than 2,400 physicians and other health-care professionals, according to the statement.

“Surgery and anesthesia go hand in glove, you can’t have one without the other,” Sheridan CEO John Carlyle said on the conference call.

Citigroup Inc. is serving as financial adviser to Amsurg and Bass, Berry & Sims Plc is providing legal counsel. Barclays, Credit Suisse and Goldman Sachs are advising Sheridan, and Simpson Thacher & Bartlett LLP is providing legal counsel.