June 8, 2016 / 8:55 PM / 3 years ago

Envision Healthcare in talks to merge with AmSurg: sources

(Reuters) - Envision Healthcare Holdings Inc EVHC.N is in advanced talks to merge with AmSurg Corp AMSG.O, in a deal that would combine two of the largest U.S. outsourced physician services providers, people familiar with the matter said on Wednesday.

The merger would increase operating efficiency and profit margins for the two companies, the sources said, at a time when consolidation among health insurance companies and hospitals is placing downward pressure on costs throughout the healthcare sector.

A deal between Envision and AmSurg could be announced as early as next week, the people said, asking not to be identified because the negotiations are confidential. Envision and AmSurg representatives did not immediately respond to requests for comment.

The Wall Street Journal first reported on the talks.

Shares of Envision Healthcare, whose market value was $4.78 billion as of Tuesday’s close, were up 5.7 percent in extended trading. AmSurg’s market value was $4.18 billion as of Tuesday’s close.

Nashville, Tennessee-based AmSurg provides outsourced physician services to hospitals and other healthcare providers. It also operates more than 200 ambulatory, or walk-in, surgery facilities, which treat patients who do not require overnight stays.

Envision, which is based outside of Denver, also provides outsourced services, along with services related to medical transportation.

In 2015, AmSurg approached Team Health Holdings Inc TMH.N, another major player in the physician outsourcing space, with an unsolicited takeover bid worth around $5 billion. Team Health rebuffed the offer, and AmSurg eventually withdrew the bid.

Reporting by Carl O'Donnell and Greg Roumeliotis in New York; Editing by Leslie Adler

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