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TeamHealth, a U.S. hospital staffing provider, has been the
target of activist funds including Jana Partners LLC.
Blackstone will pay TeamHealth shareholders $43.50 per share
held, a premium of about 18 percent to the stock's Friday close.
TeamHealth's shares rose to $42.45 in premarket trading on
Monday.
The deal, expected to close in the first quarter of 2017, would
allow TeamHealth to cope with pricing pressure as a private
company, amid a wave of consolidation.
The U.S. physician services industry has been rapidly
consolidating to counter rising administrative costs due to
President Barack Obama's Affordable Care Act and the desire to
offer a broader array of services to hospitals.
Rival Amsurg Corp <AMSG.O>, whose $5 billion bid for TeamHealth
was snubbed last year, agreed in June to merge with Envision
Healthcare Holdings Inc <EVHC.N>.
Following its rejection of Amsurg's offer, TeamHealth in
November acquired smaller peer IPC Healthcare Inc for $1.6
billion.
Knoxville, Tennessee-based TeamHealth, which offers outsourcing
services, including emergency medicine, anesthesiology and
ambulatory care, to hospitals and physician groups, had
outstanding debt of $2.47 billion as of June 30.
Reuters earlier this month reported Blackstone was the lead
bidder for TeamHealth, citing sources.
Team Health agreed in March to add three directors to its board
following a deal with Jana, which had criticized its "missteps
in critical areas including capital allocation, strategy and
governance".
Goldman Sachs is the lead financial adviser and Citi the
co-financial adviser to TeamHealth, while Simpson Thacher &
Bartlett is the legal counsel.
BofA Merrill Lynch is Blackstone's financial adviser, while
Kirkland & Ellis LLP and Ropes & Gray LLP are its legal counsel.
(Reporting by Natalie Grover in Bengaluru; Editing by Sriraj
Kalluvila and Shounak Dasgupta)
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