Envision declares Chapter 11
Envision Healthcare, the medical staffing company owned by KKR, filed for Chapter 11 bankruptcy Monday, ending a yearslong saga.
Why it matters: It could be one of the largest health care-related bankruptcy cases ever, the Wall Street Journal reports.
Details: Nashville-based Envision estimated assets and liabilities in the range of $1 billion to $10 billion each, the company said in a court filing.
- Under an agreement for debt obligations of about $7.7 billion, Envision's ambulatory surgery unit Amsurg, and its doctor practice Envision Physician Services, will now be separately owned.
- The Amsurg unit will buy surgery centers held by the company for $300 million, along with a waiver of intercompany loans held by Amsurg, Envision said in a statement.
- Envision's debt will be canceled, clearing the company's balance sheet by about $5.6 billion, it said.
- Envision declined to comment beyond what it said in the court filing.
Catch up quick: KKR was the fourth private equity firm to own Envision, acquiring the business for $9.9 billion in 2018.
- High labor costs, an ongoing battle with insurer UnitedHealth around emergency room claims, and federal legislation aimed at clipping surprise medical bills have dragged down the company's margins in recent years.
- In March, Envision missed a deadly to report quarterly financials and skipped an interest payment due in April.
What we're watching: Amsurg is a logical candidate to be spun off, given it's less affected by hospital volumes and the No Surprises Act, one health care banker says.
A version of this story was published first in Axios Pro Health Tech deals. Start a free trial at AxiosPro.com.