Envision in June changed its name from Emergency Medical Services to reflect a diversity of offerings beyond just emergency care. It previously traded on the NYSE until 2011, when public equity firm Clayton, Dubilier & Rice took the company private in a $3.2 billion deal.
Since then, it has continued to grow through acquisitions. In January, for instance, the company bought Guardian Healthcare Group, a provider of skilled-nursing and therapy services, to fold into Evolution. It also bought two anesthesiology groups under its EmCare division.
Several analysts Monday initiated coverage of the company with a “buy” or “outperform” rating, noting that it is in a growth-space that is poised to benefit from healthcare reform.
At UBS, analyst A.J. Rice forecasted double-digit growth for the company, particularly in its physician services division, and said it will be a “clear winner” as more individuals gain health insurance coverage next year. Self-pay patients currently represent 18% of total volumes at AMR and EmCare.
Frank Morgan, an analyst at RBC Capital Markets, similarly wrote that Envision is an “industry leader” with a “solid path for sustainable growth,” as hospitals continue to outsource emergency department services and municipal governments outsource ambulance services.
He added that its contracts average two to three years in length and the company has seen retention rates of 90% or higher.
Envision is also a “market leader in its highly fragmented industries,” and has $200 million in free cash flow and IPO proceeds that can be used to buy up smaller operators in its space, wrote Kevin Campbell, an analyst at Avondale Partners.
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