Onex in 10x healthcare exit

The firm has agreed to sell Emergency Medical Services Corporation (EMSC) to Clayton Dubilier & Rice for $3.2bn. Upon closing of the transaction, EMSC will no longer be traded on the New York Stock Exchange.

Toronto-based Onex Corporation has agreed to sell Emergency Medical Services Corporation (EMSC) to Clayton Dubilier & Rice for $3.2 billion, generating roughly a 10x return multiple.

EMSC provides healthcare transportation services and outsourced facility-based physician services in the US. Under the terms of the agreement, EMSC stockholders would receive $64 for each share of EMSC stock. Onex acquired the business in 2005 at a price of $6.67 per share.

The transaction is expected to close in the second quarter of 2011, after which EMSC will become a privately held company and will no longer be traded on the New York Stock Exchange.

Financing for the deal was provided by Barclays Capital, Deutsche Bank, Bank of America Merrill Lynch, Morgan Stanley, RBC Capital Markets and UBS.

Onex has sold stakes in EMSC at least twice before. In November 2009, the firm sold a partial stake at a price of approximately $48 per share, roughly seven times the $6.67 per share price Onex paid to acquire the business. The deal marked the second secondary offering of EMSC shares by Onex following the sale of a partial stake for $40 per share in August 2009.

Onex will receive total net proceeds of $1.65 billion, including the secondary offerings completed in 2009.

Clayton Dubilier & Rice closed its eighth buyout fund on $5 billion in January 2010, attracting limited partners such as the Maryland Retirement System, the Teachers’ Retirement System of Texas and the South Carolina Retirement System.