TeamHealth to Acquire Skilled Nursing Provider IPC Healthcare for $1.6B

by Jeff Shaw

KNOXVILLE, Tenn. and NORTH HOLLYWOOD, Calif. — Team Health Holdings Inc. (NYSE: TMH), a provider of outsourced physician staffing solutions for hospitals, will acquire IPC Healthcare Inc. (Nasdaq: IPCM), a post-acute provider, in an all-cash transaction totaling approximately $1.6 billion. The boards of directors of both companies have approved the transaction.

The purchase price represents $80.25 per IPC share based on the closing cost on Aug. 3.

“We are excited to announce this strategic transaction with IPC Healthcare to create the leading physician services organization spanning multiple specialties,” says Mike Snow, TeamHealth president and CEO. “Through this combination, TeamHealth will be better positioned to capitalize on key trends as the U.S. healthcare industry moves toward value-based reimbursement with an increased focus on post-acute care and services.”

Knoxville-based TeamHealth suggests the addition of IPC’s service network will increase the company’s reach. With 15,000 healthcare professionals nationwide, the combined company will have more capability to manage patient care and influence outcomes across the continuum of care. North Hollywood-based IPC currently provides services in approximately 2,000 post-acute facilities in 28 states.

“This agreement provides an immediate cash premium to our shareholders, and we look forward to partnering with TeamHealth to advance our mission of delivering high-quality inpatient care efficiently and cost-effectively,” says Adam Singer, IPC’s CEO.

Accounting for operational overlap, TeamHealth expects to realize $60 million in cost savings during the first three years.

The transaction, which is expected to close during the fourth quarter of 2015, is subject to regulatory approval and customary closing conditions.

Citi is serving as financial advisor to TeamHealth and providing the committed financing in connection with the transaction. MTS Health Partners is also serving as financial advisor to TeamHealth.

Simpson Thacher & Bartlett LLP is serving as TeamHealth’s legal counsel. Credit Suisse is serving as lead financial advisor to IPC Healthcare and Evercore provided a fairness opinion. Sidley Austin LLP is serving as IPC Healthcare’s legal counsel.

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