UnitedHealth Group Inc. has joined the bidding for a unit of Envision Healthcare Corp., the health-services provider under pressure from activist investor Starboard Value, according to people familiar with the matter.
Envision has attracted interest from health insurer UnitedHealth for its ambulatory services unit, said the people, who asked not to be identified as the details aren’t public. Separate groups of private equity firms, including a consortium comprised of Hellman & Friedman, Onex Corp. and Clayton Dubilier & Rice, as well as one led by Carlyle Group LP, are still interested in buying the whole company but would also be open to acquiring parts, the people said. A deal could be announced in the coming weeks, they said.
Shares of Envision jumped as much as 5.9 percent in New York trading. The stock traded up 3.4 percent at $41.81 as of 3:33 p.m., valuing the Nashville, Tennessee-based company at about $5 billion.
The ambulatory services unit, which owns and operates day surgery centers, accounted for about 16 percent of Envision’s revenue in 2017. The company’s shares had slumped 40 percent in the past year through Monday.
If UnitedHealth is successful in its bid for the surgical unit, the two groups of buyout firms may acquire remaining assets from the company, the people said.
Carlyle is partnering with TPG Capital on the bid, the people said. Members of the other group have owned various parts of Envision’s business in the past, one of the people said, and are keen to acquire the company.
Representatives for UnitedHealth, Carlyle, Hellman & Friedman, TPG and Onex declined to comment. Envision and CD&R didn’t respond to requests for comment.
Minnetonka, Minnesota-based UnitedHealth, which has been diversifying away from insurance to become a broader health-services company, last year acquired Surgical Care Affiliates Inc. for $2.3 billion.
Envision announced a review of strategic options in October, shortly after activist investor Starboard, run by Jeff Smith, revealed a stake in the company and said it would make an attractive takeover target. Corvex Management, another activist firm, is also a shareholder.
Envision, which offers services including surgery and medical imaging, agreed to sell its air-ambulance business to KKR & Co. in August for $2.4 billion.