Leonard Green to Buy ExamWorks in $2.2 Billion Deal

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.

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(END) Dow Jones Newswires

April 27, 2016 15:05 ET (19:05 GMT)

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