Nobilis Health Corp. N.HLTH

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[SBAASTOCKS11]

Proposal Values TeamHealth (TMH-NYSE, not rated) at 17x EBITDA: Earlier this morning, AMSG (not rated) announced a proposed acquisition of TMH at a price implying an enterprise value of $7.8 billion. Based on current consensus estimates for F2016 ($455 million), this implies an EV/EBITDA multiple of over 17x (pre-synergies). TMH provides outsourced physician services for needs such as emergency medicine, hospital medicine, anesthesia and urgent care. The combined company would be known as TeamHealth, and would operate a network of over 1,200 healthcare facilities and 20,000 physicians.

Going Hostile – The Chase is On: No definitive agreement has been reached. The AMSG announcement included a copy of a letter sent to TMH’s Chairman last week, which followed a meeting between them on September 30th. The letter noted disappointment that TMH had chosen not to engage with AMSG, and urged it to reconsider. TMH reportedly expressed concern about timing, given TMH is still working to complete its $1.6 billion acquisition of IPC Healthcare, for which the definitive agreement was just announced in August 2015. The purchase price proposed by AMSG contemplates $200 to $290 million in annual synergies, with free cash flow generation that should enable rapid de-leveraging.

AMSG Reports Strong Preliminary Q3/15 Results: The Company also reported preliminary results that beat consensus estimates for the quarter. This includes revenue of

$650 million (consensus $632 million), adjusted EBITDA of $133 (v. consensus $124 million) and adjusted diluted earnings of $1.03 per share (v. consensus $0.90 per share).