Envision is a ‘Strong Buy’, says analysts after $9.9-billion acquisition offer by KKR

Global investment firm KKR (KKR) agreed to buy Envision Healthcare Corp (EVHC) in an all-cash transaction of $9.9 billion. The is expected to close by the fourth quarter of 2018, subject to customary closing conditions and regulatory approvals. According to data by Nasdaq, 9 out of 11 analysts covering the EVHC stock recommends ‘Strong Buy.’

Envision had on November 1, 2017, announced that it was looking at “strategic alternatives to enhance shareholder value.” According to the company, the Board spent the last seven months exploring many options to achieve this, including potential acquisitions, capital structure alternatives, portfolio optimization, continued operation as a standalone business, and finally, a potential sale of the whole company. Discussions with 25 potential buyers finally ended up in the KKR deal.

The all-cash deal of $46 per share represents a 32% premium to Envision’s volume-weighted average share price (VWAP) as on November 1, 2017. KKR shares are currently trading up 0.8% at $23.17, while EVHC is up 2.66% to $44.80.

In November, when the company said it was looking for strategic alternatives, the shares tanked to close at $28.03 on the first day of the month. From there, Envision has seen just small bouts of ups and down till last weekend.

With a strong roster of analysts backing the stock, marking it bullish, we can expect the price to go up further closing in on the deal value. Even though this is not much from the $60-mark it hit around this time last year, this upbeat trading is helping shareholders get back some value from the investment. Let’s hope KKR turns this arm around and gets Envision to deliver after the deal goes through later this fiscal year.