Joe France, a Cantor Fitzgerald analyst, said AmSurg, a dominant player in the ambulatory surgery center area, may have to closely examine its ASC services following its Envision Health merger, according to Nashville Post.
Here are four things to know:
1. Mr. France said the companies may very well decide their ASCs and ASC services may not compliment their physician services business lines following the merger, which may cause the combined entity to leave the ASC industry.
2. Mr. France wrote, "We estimate AMSG ambulatory surgical centers could be worth $2-$2.5 billion and EVHC's AMR ambulance business $2.2-$2.8 billion. We think such a restructuring could translate into a $4-$5 upside potential in the stock price."
3. During the first quarter of 2016, AmSurg net revenues for ambulatory services reached $307.1 million, up 8 percent from $283.9 million for the first quarter the year prior. The company's net revenues reached $724.7 million, a 27 percent increase from $570.4 million for the same quarter of 2015.
4. However, William A. Sanger, Envision's chairman of the board, president and CEO, did not delve into specific plans about divesting parts of their combined business. Mr. Sanger did, however, discuss the possibility of cross-selling the company's services.
More articles on surgery centers:
AmSurg finalizes $10B merger with Envision Healthcare, SCA establishes its 1st physician advisory board & more — 6 key notes on ASC companies
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SCA establishes its 1st physician advisory board, with 6 members