Leonard Green to Buy ExamWorks in $2.2 Billion Deal
April 27 2016 - 2:20PM
Dow Jones News
Leonard Green & Partners LP has agreed to take independent
medical examination services provider ExamWorks Group Inc. private
in a deal valued at around $2.2 billion.
The Los Angeles private-equity firm is offering to buy the
publicly listed ExamWorks at $35.05 a share in cash, representing a
22% premium on the 90-day volume-weighted average closing price of
the company's shares as of April 26. ExamWorks shares rose nearly
7% in afternoon trading over Tuesday's close of $33.57.
The merger, subject to approval from ExamWorks shareholders and
other closing conditions, is expected to close in the third
quarter, according to a news release.
Independent review services are used in evaluating health-care
claims for accuracy and legitimacy, and are increasingly important
to insurers and government payers as health-care costs mount.
Apart from independent reviews, ExamWorks, founded eight years
ago and based in Atlanta, also offers peer reviews, bill reviews,
Medicare compliance, case management, record retrieval, document
management and other related services.
It said it serves more than 6,000 clients globally, including
property and casualty insurance carriers, law firms, third-party
claim administrators and government agencies, helping them manage
costs and enhance their risk-management and compliance
processes.
In February, the company said it posted $819.6 million of
revenue last year and $140.7 million in adjusted earnings before
interest, taxes, depreciation and amortization, an increase of 6.5%
over 2014.
Bank of America Corp.'s Merrill Lynch, Barclays PLC and Deutsche
Bank AG committed debt financing for the transaction and served as
Leonard Green's financial advisers as well. Leonard Green had law
firm Latham & Watkins LLP as its legal adviser.
Meanwhile, investment banks Goldman Sachs Group Inc. and
Evercore Group LLC, and law firm Paul Hastings LLP served as
ExamWorks' advisers.
Founded in 1989, Leonard Green backs midmarket companies in a
variety of industries, including health care, consumer and business
services, consumer products, distribution, and financial
services.
Often associated with its retail investments such as Container
Store Group Inc. and Shake Shack Inc., the firm has more than a
handful of health-care investments. In March last year, it teamed
up with American Securities LLC and Ares Management LP in the
recapitalization of dental practice management company Aspen Dental
Management Inc.
In November Dow Jones, citing people familiar with the
situation, reported that the firm had engaged investment bank
Morgan Stanley to explore a possible sale of Prospect Medical
Holdings Inc. in a deal that might value the hospital operator at
as much as $1 billion.
Write to Amy Or at amy.or@wsj.com
(END) Dow Jones Newswires
April 27, 2016 15:05 ET (19:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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