Exhibit 99.1
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Exhibit 99.1
JUNE 2016
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INFORMATION RELATED TO THIS COMMUNICATION
No Offer or Solicitation / Additional Information and Where to Find It
This communication is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval with respect to the proposed business combination between Envision Healthcare Holdings, Inc. (“Envision”) and AmSurg Corp.
(“AMSURG”) or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended. The proposed business combination between Envision and AMSURG will be submitted to their respective shareholders for consideration. AMSURG will cause its newly formed, wholly owned subsidiary, New Amethyst Corp. (“New Amethyst”), to file with the Securities and Exchange Commission (the “SEC”) a Registration
Statement on Form S-4 that will constitute a prospectus of New Amethyst and a joint proxy statement of Envision and AMSURG. Envision and AMSURG will deliver the joint proxy statement/prospectus to their respective shareholders as required by applicable law. This communication is not a substitute for any prospectus, proxy statement or any other document that may be filed with the SEC in connection with the proposed business combination. Investors and shareholders are urged to read carefully and in their entirety the joint proxy statement/prospectus and any other relevant documents that will be filed with the SEC when they become available because they will contain important information about the proposed business combination and related matters. Investors and shareholders will be able to obtain free copies of the joint proxy statement/prospectus and other documents containing important information about Envision, AMSURG and New Amethyst, once such documents are filed with the SEC, through the website maintained by the SEC at www.sec.gov. Envision and AMSURG make available free of charge at www.evhc.net and www.amsurg.com, respectively (in the “Investors” section), copies of materials they file with, or furnish to, the SEC.
Participants in The Merger Solicitation
Envision, AMSURG and certain of their respective directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the shareholders of Envision and AMSURG in connection with the proposed business combination. Information about the directors and executive officers of Envision is set forth in its proxy statement for its 2016 annual meeting of shareholders filed with the SEC on March 23, 2016. Information about the directors and executive officers of AMSURG is set forth in its proxy statement for its 2016 annual meeting of shareholders filed with the SEC on April 22, 2016 and its Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC on February 25, 2016. These documents can be obtained free of charge from the sources indicated above. Other information regarding those persons who are, under the rules of the SEC, participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.
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FORWARD-LOOKING STATEMENTS AND NON-GAAP FINANCIAL INFORMATION
Forward-Looking Statements
Certain statements and information in this presentation may be deemed to be “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Forward-looking statements may include, but are not limited to, statements relating to Envision’s and AMSURG’s objectives, plans and strategies, and all statements (other than statements of historical facts) that address activities, events or developments that Envision and AMSURG intend, expect, project, believe or anticipate will or may occur in the future. These statements are often characterized by terminology such as “believe,” “hope,” “may,” “anticipate,” “should,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy” and similar expressions, and are based on assumptions and assessments made by Envision’s and AMSURG’s management in light of their experience and their perception of historical trends, current conditions, expected future developments, and other factors they believe to be appropriate. Any forward-looking statements in this presentation are made as of the date hereof, and Envision and AMSURG undertake no duty to update or revise any such statements, whether as a result of new information, future events or otherwise. Forward-looking statements are not guarantees of future performance. Whether actual results will conform to expectations and predictions is subject to known and unknown risks and uncertainties, including: (i) risks and uncertainties discussed in the reports that Envision and AMSURG have filed with the SEC; (ii) general economic, market, or business conditions; (iii) risks associated with the ability to consummate the business combination between Envision and AMSURG and the timing of the closing of the business combination; (iv) the ability to successfully integrate Envision’s and AMSURG’s operations and employees; (v) the ability to realize anticipated benefits and synergies of the business combination; (vi) the potential impact of announcement of the business combination or consummation of the transaction on relationships, including with employees, customers and competitors; and (vii) other circumstances beyond Envision’s and AMSURG’s control. Refer to the section entitled “Risk Factors” in Envision’s and AMSURG’s annual and quarterly reports for a discussion of important factors that could cause actual results, developments and business decisions to differ materially from forward-looking statements.
Non-GAAP Financial Information
This presentation includes certain financial measures that were not prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), including Adjusted EBITDA, Unlevered Free Cash Flow and Pro Forma Net Debt. The items excluded from these non-GAAP measures are important in understanding Envision’s and AMSURG’s financial performance, and any non-GAAP measures presented should not be considered in isolation of, or as an alternative to, GAAP financial measures. Since these non-GAAP financial measures are not measures determined in accordance with GAAP, have no standardized meaning prescribed by GAAP and are susceptible to varying calculations, these measures, as presented, may not be comparable to other similarly titled measures of other companies.
Adjusted EBITDA of Envision is defined as net income (loss) before equity in earnings of unconsolidated subsidiary, income tax benefit (expense), loss on early debt extinguishment, other income (expense), net, realized gains (losses) on investments, interest expense, net, equity-based compensation expense, transaction costs related to acquisition activities, restructuring and other charges, adjustment to net loss (income) attributable to non-controlling interest due to deferred taxes, and depreciation and amortization expense. Adjusted EBITDA of AMSURG is defined as earnings before interest expense, net, income taxes, depreciation, amortization, share-based compensation, transaction costs, changes in contingent purchase price consideration, gain or loss on deconsolidations and discontinued operations. Except for purposes of calculating leverage ratios, Adjusted EBITDA does not include pro forma results for completed acquisitions. Unlevered Free Cash Flow for Envision and AMSURG is defined as cash flow from operations less capital expenditures, less distributions to minority interests, plus cash interest expense, plus restructuring/other charges and transaction costs. Pro Forma Net Debt for Envision and AMSURG is defined as long-term debt and capital lease obligations less cash and cash-equivalents. Adjusted Earnings per Share is defined as diluted earnings per share adjusted for amortization expense, equity-based compensation expense, restructuring and other charges, severance and related costs, loss on early debt extinguishment and transaction costs related to acquisition activities, net of estimated tax benefit.
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PROPOSED MERGER CREATES A NATIONWIDE HEALTHCARE SERVICES ORGANIZATION
William A. Sanger Christopher A. Holden
Executive Chairman President and Chief Executive Officer
(current Chairman, President and CEO(current President and CEO of AMSURG)
of Envision)
Differentiated advancing
suite of partnership
solutions and with systems,
national payors and
scale… patients…
…driving …creating
significant significant
growth across value for all
segments… shareholders
$8.5 billion
Combined LTM Net Revenue(1)
$1.1 billion
Combined LTM Adjusted EBITDA(1)(2)
$720 million
Combined LTM Unlevered Free Cash Flow(1)(3)
$100 million
Expected Combined Synergies
Accretive in 2017
Double-digit accretion in 2018(4)
Source: Company filings, investor presentations, management estimates, and FactSet market data.
(1) LTM as of 3/31/2016. Does not include expected synergies from this transaction. Does not include pro forma results for completed acquisitions.
(2) Adjusted EBITDA is defined above under “Non-GAAP Financial Information”.
(3) Unlevered Free Cash Flow is defined above under “Non-GAAP Financial Information”.
(4) Accretive to the two combined companies’ Adjusted Earnings Per Share. Adjusted Earnings Per Share is defined above under “Non-GAAP Financial Information.”
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CREATING SIGNIFICANT VALUE FOR ALL SHAREHOLDERS
Transformational Strategic Combination
Highly differentiated suite of clinical solutions to support health systems, communities and payors Significantly diversified business mix across specialties, customers and geographies Broader continuum of patient care Well positioned for the changing healthcare landscape
Accelerates Growth Across All Business Segments
Highly fragmented $180 billion addressable markets Cross-selling of client base
Expansion opportunities through service offerings to enhance organic growth and M&A
Strong Cash Flow and Deleveraging Profile
Pro Forma Net Debt / Adjusted EBITDA at close of 4.2x(1)
Financially Compelling
Expected to be accretive to Adjusted Earnings per Share(2) in 2017; double-digit accretive in 2018 $100 million of expected combined synergies
POSITIONED FOR LEADERSHIP AND GROWTH
Notes:(1) LTM Total Debt to Adjusted EBITDA and Net Debt to Adjusted EBITDA. For purposes of calculating leverage ratios, Adjusted EBITDA for each of Envision and AMSURG includes pre-acquisition Adjusted EBITDA of certain acquired companies. Also includes 50% of expected cost synergies from this transaction. (2) Adjusted Earnings per Share is defined above under “Non-GAAP Financial Information”.
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SUMMARY TERMS OF TRANSACTION
Transaction All-stock, tax-free merger of equals transaction at a fixed exchange ratio of 0.334
Structure AMSURG shares per Envision share
Ownership Pro forma ownership split of 53% Envision / 47% AMSURG
$100 million of run-rate synergies expected to be achieved in full over three years
Synergies Approximately $50 million of cost synergies and $50 million of revenue synergies
William A. Sanger to serve as Executive Chairman for one year, then will continue as
Corporate Chairman for an additional two years
Information, Christopher A. Holden to serve as President and CEO
Leadership 14 member board (evenly comprised of current Envision and AMSURG directors)
and Combined company to be named Envision Healthcare Corporation and expected to trade
Governance on the NYSE as “EVHC”
Company headquarters in Greenwood Village, CO and Nashville, TN
Pro Forma Net Debt / Adjusted EBITDA of 4.2x(1)
Financing Committed financing in place to refinance and optimize capital structure
Expected close by year-end 2016
Timing—Shareholder approval required for both companies
Approvals Subject to customary closing conditions including regulatory approvals
Notes:(1) LTM Net Debt to Adjusted EBITDA. For purposes of calculating leverage ratios, Adjusted EBITDA for each of Envision and AMSURG includes pre- acquisition Adjusted EBITDA of certain acquired companies. Also includes 50% of expected cost synergies from this transaction.
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REFINANCING TO OPTIMIZE CAPITAL STRUCTURE
New debt used to refinance existing debt and pay transactions fees:
$1,010 million AMSURG credit facilities
$250 million AMSURG 5.625% senior unsecured notes due 2020
$1,273 million Envision term loan B due 2018
Pro Forma capital structure:
$1.0 Billion ABL
No near-term maturities
Allows de-levering through growth
Facilitates continued M&A activities while maintaining manageable leverage
JPMorgan and Barclays providing committed financing
PRO FORMA CAPITALIZATION
Cash $ 0.3 billion
Total Secured Debt $ 3.0 billion
Total Debt $ 5.7 billion
Total Leverage (1) 4.4x
Net Leverage (1) 4.2x
Source: Company filings.
(1) LTM Total Debt to Adjusted EBITDA and Net Debt to Adjusted EBITDA. For purposes of calculating leverage ratios, Adjusted EBITDA for each of Envision and AMSURG includes pre-acquisition Adjusted EBITDA of certain acquired companies. Also includes 50% of expected cost synergies from this transaction.
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COMBINATION OF TWO BEST-IN-CLASS PLATFORMS
Headquarters: Greenwood Village, Colorado Headquarters: Nashville, Tennessee
Market Capitalization (as of 6/14/16): $5.4 billion Market Capitalization (as of 6/14/16): $4.6 billion
LTM Metrics (1) Net Revenue: $5.8 billion Net Revenue: $2.7 billion
Adj. EBITDA: $627 million Adj. EBITDA: $519 million
Employees:
51,000 Employees:
12,400
Highlights Leading provider of physician-led clinical solutions and medical transportation Leading, physician-centric surgical center and physician services company
Over 900 EmCare contracts and over 245 AMR “911” contracts Operates 256 ASCs and provides physician services to over 540 contracts
EmCare: facility-based physician services including emergency, hospitalist, anesthesia and surgery Sheridan: facility-based physician services including anesthesiology, radiology, neonatology and emergency
Complementary Service Offerings AMR: medical transportation including “911” emergency response and non-emergency transport services for communities, healthcare facilities and payors Evolution Health: specializes in physician-led, population management services in the post-acute, home, and mobile environment Ambulatory Surgery Centers (ASCs): operator of surgical facilities primarily providing high volume, lower-risk surgical procedures across multiple specialties, including gastroenterology, ophthalmology and orthopedics
Revenues by Business Unit(1)
Other Surgery
Anesthesia 4% 1% Radiology
4% 1%
Evolution
6% ED/
Hospitalist
50%
Medical
Transport
34%
Children’s
Emergency Svcs. Other
3%
4% 2%
Radiology
4%
ASC
46%
Anesthesia
39%
Source: Note: Company filings as of 5/31/2016. (1) LTM as of 3/31/2016. Does not include expected synergies from this transaction. Does not include pro forma results for completed acquisitions. Adjusted EBITDA is defined above under “Non-GAAP Financial Information”.
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TRANSFORMATIONAL STRATEGIC COMBINATION
Pursuit of…
Greater Scale and Scope
Enhanced continuum of services and national footprint provides better options to partners
Performance Excellence
Specialization creates capabilities and infrastructure to support continued growth
Local Relevance
Creates value by delivering to systems, payors and patients integrated care across the patient continuum
MORE THAN 28.6 MM PATIENT ENCOUNTERS ACROSS BRANDS
18.0 mm Patient 5.3 mm Patient
Encounters Encounters
3.6 mm 1.7 mm
Transports Procedures
SHARED VISION: TO BE THE MOST TRUSTED STRATEGIC PARTNER FOR PROVIDERS, HEALTH SYSTEMS, COMMUNITIES AND PAYORS IN THE COMMON PURSUIT OF DELIVERING
THE HIGHEST QUALITY OF CARE FOR THE PATIENTS WE SERVE
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CHANGING HEALTHCARE LANDSCAPE
TODAY’S MARKETPLACE MARKETPLACE OF THE FUTURE
Comprehensive Provider Groups Partnering
Traditional Group Practices With Health Systems to Build Solutions
Limited Quality Management Scaled Businesses with Data-Driven
Infrastructure Quality & Proven Outcomes
Fragmented Single-Specialty Differentiated & Trusted
Focus Multi-Specialty Provider
Fee-for-Service Value-Based Care Models Providing Improved
Outcomes, Efficiency & Experiences
ESTABLISHED LEADER IN NEW HEALTHCARE MARKETPLACE
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DIFFERENTIATED SUITE OF CLINICAL NETWORK SOLUTIONS
TRUSTED SOLUTIONS
1
ED /
Hospitalist
Anesthes-
iology
Children’s
Services
Radiology
Surgery
Center
Post-
Acute
Medical
Transport
LTM BUSINESS MIX(1)
$8.5bn
Trans-
port
$2.0bn
Other
$1.0bn
ASC
$1.3bn
$4.5bn
Anest. Other
$1.3bn Anest. $3.1bn
Other
Maternal
ED and Neonatal
ED and Hosp.
Hosp. $3.8bn $1.3bn $1.0bn $1.0bn
$3.0bn
Anest.
$1.1bn ASC ASC
Source: Company filings and management estimates as of 5/31/2016.
Notes: (1) Actual LTM as of 3/31/16 business mix unless otherwise noted; TeamHealth based on Q1 2016 business mix applied to LTM revenue, pro forma for IPC acquisition; Mednax based on FY 2015 business mix applied to LTM revenue.
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GROWTH CATALYST
$180 BILLION HIGHLY FRAGMENTED ADDRESSABLE MARKETS
Total Annual Expenditures
Emergency Radiology /
Department & Anesthesiology Children’s Ambulatory Post Medical
Tele-radiology
Hospitalist Services Services Surgery Services Acute Transportation
Services Services
$41bn $20bn $18bn $6bn $13bn $64bn $18bn
6%
8%
99%
7% 10%
3%
86%
14%
86% 95% 1% 90%
20% 82%
79%
ED / Hospitalist Anesthesiology Radiology Children’s Services ASC Post Acute Medical Transport
National Providers Other
Source: Public filings, Wall Street Research and company management presentations.
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NATIONAL PRESENCE
>2,300 48 780
Locations and Contracts(1) States Hospitals
Locations
AMSURG
EVHC
Market Presence (MSA)
AMSURG
EVHC
Combined Presence
ENHANCED FOOTPRINT ALIGNS WITH PARTNERS
TO BUILD HIGH PERFORMING CLINICAL NETWORKS
Notes: (1) Location and contract count based on combined ASC locations, hospital department contracts by specialty, and county-level contracts for medical transportation services.
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SIGNIFICANT GREENFIELD AND CROSS-SELL OPPORTUNITIES
Greenfield opportunity in ~2,300 hospitals…
TOTAL MARKET OPPORTUNITY
There are ~5,200 hospitals in the US
2,137
780
2,297
3,077 Target Hospitals
Expansion Opportunities (75%)
Current Hospitals Served (25%)
…significant cross-sell opportunities across continuum
EMERGENCY MEDICINE OPPORTUNITY
Sheridan has ~200 hospital contracts
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6
Only 32% have Sheridan/EmCare
40
emergency presence
Emergency medicine cross-sell
46
28
opportunity at more than 130
16
hospitals
ANESTHESIA OPPORTUNITY
19
238
EmCare has ~625 hospital contracts
96
Only 17% have Sheridan/EmCare
anesthesia presence
74
Anesthesia cross-sell opportunity
35
162
at more than 500 hospitals
Sheridan
National Players
Local
EmCare
Other
Hospital managed
CAPITALIZE ON SIGNIFICANT FIRST MOVER ADVANTAGE
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LEADERS WITH TRACK RECORD OF SUCCESS
Bill Sanger Chris Holden
Exec Chairman of New Envision President & CEO of New Envision
15 years with Envision 8 years with AMSURG
Claire Gulmi Randy Owen Robert Coward
Chief Financial Officer President of President of
Ambulatory Services Physician Services
COMMITMENT TO EXECUTION Track Record of Successful M&A
Since 2010, Envision and AMSURG have successfully deployed approximately $6 billion for acquisitions
Demonstrated track record of synergy realization
Differentiated organic growth strategy Delivering Financial Results
Each management team has delivered long-term growth in revenues and earnings
Standalone 3 year net revenue CAGRs of > 20%
Standalone 3 year Adjusted EBITDA CAGRs of > 15%
TARGETED INTEGRATION PLAN Continuity of Management
Proven execution in transformational combinations
Strongest combination of talent and practices
Near-Term Focus Areas
Corporate overhead
Alignment of emergency and anesthesia
Focus on Creating a Strong Culture
Combination of two provider-centric organizations
Shared values of building a patient-focused company
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ADDING VALUE FOR KEY STAKEHOLDERS
Trusted, Performance Helping Providers
Driven, Strategic Improve, Adapt and
Partner Grow
Improved
Accelerated Quality,
Growth Outcomes and
Efficiency
Highly Engaged National Footprint for
Workforce Innovative, Value-
Based Solutions
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