Envision Healthcare Holdings Inc. is in talks to merge with AmSurg Corp., a deal that would bring together two big providers of physician and other health-care services with a combined value of more than $9 billion.

The companies are in advanced discussions, and a deal could be announced as early as next week, according to people familiar with the matter. It isn't clear how the deal would be structured and, as always, it is possible the talks could break down before one is reached.

AmSurg, of Nashville, Tenn., provides outsourced physician services to hospitals and others. It is also a big player in so-called ambulatory surgery, with about 250 facilities performing procedures that don't require an overnight stay. Last year, AmSurg made an unsolicited approach to combine with rival Team Health Holdings Inc. AmSurg withdrew its offer after Team Health said it was too low.

Envision, based in Greenwood Village, Colo., also provides physician services like emergency care, anesthesiology and surgery, in addition to ambulance and other medical-transportation services. Last year, it agreed to buy privately held ambulance and fire-protection company Rural/Metro Corp. for $620 million.

Envision had a market capitalization of $4.8 billion Wednesday afternoon, while AmSurg was valued at $4.3 billion. Consolidation waves have swept through both the hospital and health-insurance industries in recent years, part of a broader surge in deal making. That has put pressure on companies like AmSurg to seek tie-ups that will enable them to maintain size and scope needed to keep up with customers, rivals and suppliers.

While big pharmaceutical deals like Pfizer Inc.'s later-aborted acquisition of Allergan PLC dominated 2015, more recently, there has been a flurry of tie-ups in other corners of the health-care industry. Last month, laboratory-equipment company Thermo Fisher Scientific Inc. agreed to buy FEI Co. for $4.2 billion. In April, Abbott Laboratories said it would purchase medical-products maker St Jude Medical Inc. for $25 billion. Stryker Corp. agreed to buy Sage Products in a $2.8 billion deal.

Envision reported net revenue of $5.4 billion and net income of about $150 million last year. The company's EmCare brand had more than 13,000 affiliated physicians and other clinicians, according to its annual report. Its AMR brand counted more than 20,000 paramedics and emergency medical technicians.

Amsurg had $2.6 billion of revenue and net earnings of just over $150 million last year. In addition to so-called ambulatory surgery centers, it provided physician services to more than 450 facilities across 29 states, according to its annual report. The company employs or partners with more than 5,000 doctors and other health-care professionals in 38 states.

AmSurg also has been acquisitive, buying physician-outsourcing service provider Sheridan Healthcare Inc. for about $2.3 billion 2014.

Write to Dana Mattioli at dana.mattioli@wsj.com and Dana Cimilluca at dana.cimilluca@wsj.com

 

(END) Dow Jones Newswires

June 08, 2016 17:45 ET (21:45 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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