What: Shares of the acute hospitalist and post-acute care services company IPC Healthcare (NASDAQ: IPCM) gained over 40% today on exceptional volume after the company announced that it agreed to a $1.6 billion tender offer from TeamHealth Holdings. Per the terms of the deal, TeamHealth will pay $80.25 per share for IPC Healthcare in an all-cash deal, representing a 37% premium compared to where the company's share closed Monday. The deal is expected to close sometime in the fourth-quarter of this year, and immediately add to TeamHealth's 2016 earnings.
So what: This buyout will greatly expand TeamHealth's medical staffing business, especially in the area of post-acute care. As a result, it should help to set the company up to better handle the ongoing transition to a value-based reimbursement system in the U.S. in the post-acute setting.
Now what: This deal will greatly diversify TeamHealth's services, as well as its physician network. Most importantly, though, it gives the medical staffing company a strong growth platform moving forward. Prior to this buyout, IPC Healthcare was projected to post a 20% increase in earnings per share, on average, for the next five years, fueled mainly by its post-acute services.