BX Blackstone Inc

Team Health Holdings Inc. is exploring a sale to a private-equity firm, according to people familiar with the matter, a year after the health-care-services firm rejected a takeover offer from a rival.

Team Health, which had a market value of $2.4 billion on Tuesday afternoon, is in talks with Blackstone Group LP and Bain Capital and could reach a deal to go private this month, some of the people said. As always, the talks could fall apart before a deal is reached.

Team Health, based in Knoxville, Tenn., offers outsourced health-care services, such as emergency care, hospital medicine and anesthesiology, according to its website.

The company has $2.4 billion in debt, putting its so-called enterprise value at around $4.8 billion, according to S&P Global Market Intelligence.

Last year, AmSurg Corp. made an unsolicited approach to combine with Team Health but withdrew its offer after Team Health said it was too low. At the time, the cash-and-stock offer valued Team Health at around $5 billion.

In June, AmSurg instead signed a deal to merge with Envision Healthcare Holdings Inc.

Earlier this year, activist investor Jana Partners took an 8% stake in Team Health, saying the company had "made missteps in critical areas including capital allocation, strategy and governance" and "would benefit from the addition of new directors with the necessary expertise, experience and focus on shareholder value."

In a rare move for the activist, Jana said it was nominating directors on the day it disclosed its stake, as opposed to engaging in discussions with the company before making such a move. In March, Team Health settled with Jana, agreeing to add three directors to its board.

Activists Sachem Head Capital Management LP and Corvex Management LP are also top-10 shareholders in Team Health.

Consolidation waves have swept through the hospital and health-insurance industries, as part of a broader surge in deal-making in the health-care and other sectors of the economy in recent years.

Health-care services has been a particularly busy area. In August, patient-survey company Press Ganey Holdings Inc. agreed to sell itself to Swedish private-equity firm EQT for $2.4 billion. In June, health-care giant McKesson Corp. said it would combine most of its technology segment with the bulk of Change Healthcare Holdings Inc.

Write to Dana Mattioli at dana.mattioli@wsj.com, David Benoit at david.benoit@wsj.com and Matt Jarzemsky at matthew.jarzemsky@wsj.com

(END) Dow Jones Newswires

October 04, 2016 17:05 ET (21:05 GMT)

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