Robbins LLP: Acquisition of Team Health Holdings, Inc. (TMH) by The Blackstone Group L.P. (BX) May Not Be in Shareholders’ Best Interests
Robbins LLP is investigating the proposed acquisition of Team Health Holdings, Inc. (NYSE: TMH) by The Blackstone Group L.P. (NYSE: BX). On October 31, 2016, the two companies announced the signing of a definitive merger agreement pursuant to which Blackstone will acquire Team Health. Under the terms of the agreement, Team Health shareholders will receive $43.50 for each share of Team Health common stock.
Is the Proposed Acquisition Best for Team Health and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at Team Health is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $43.50 merger consideration is significantly below the target price of $61.00 set by an analyst at RBC Capital Markets on August 4, 2016; the target price of $52.00 set by an analyst at Canaccord Genuity on August 3, 2016; and the target price of $50.00 set by an analyst at SunTrust Robinson Humphrey on August 3, 2016. Further, in the last three years, Team Health traded as high as $70.21 on August 5, 2015, and most recently traded above the merger consideration – at $44.65 – on June 23, 2016.
On August 2, 2016, Team Health reported strong earnings results for its second quarter 2016. Team Health reported net revenue of $1.12 billion for the three months ended June 30, 2016, a 27.9% increase from the same period of the prior year. Additionally, Team Health has beaten analyst estimates for adjusted net income in three of the last four consecutive quarters. In commenting on these results, Team Health President and Chief Executive Officer Mike Snow remarked, “We delivered another quarter of double digit growth in net revenue and adjusted EBITDA, coupled with solid growth in operating cash flows .… As a result of our financial performance in the first half of 2016, and our current expectations about operating trends and growth opportunities for the remainder of the year, we have revised our estimate for net revenue growth for fiscal year 2016 to range between $4.64 billion and $4.71 billion, reflecting an annual growth rate of 29% to 31% …. We remain confident in our ability to execute in this environment and maintain committed to delivering the highest quality patient care, supporting our affiliated clinicians and hospital partners, and achieving our operational and financial goals for 2016.”
In light of these facts, Robbins LLP is examining Team Health’s board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Team Health shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Team Health shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.