The combined company’s ownership would be split 50-50 between the two sets of shareholders. The proposal has a total enterprise value of $7.8 billion, based on AmSurg’s closing stock price October. 19, according to AmSurg.

“AmSurg and TeamHealth together will become the most comprehensive provider of outsourced clinical services to health systems, and will create a platform for unprecedented growth in the sector”, said Christopher Holden, president and CEO of AmSurg, in a statement.

Now what: While the deal was only announced publicly this morning, AmSurg had apparently approached Team Health with a proposal to combine companies last month, but that proposal was quickly rejected, as Team Health’s management felt that even with the premium the offer still undervalued the company. Team Health shareholders will receive immediate cash value equivalent to 22% of its market capitalization, and share equally in our combined company’s upside. TeamHealth is nearing the completion of its $1.6 billion acquisition of IPC Healthcare, a national acute hospitalist and post-acute provider organization. AmSurg highlighted its successful integration of its May 2014 purchase of Sheridan Healthcare, a deal that came with a price tag of $2.35 billion.

Since its acquisition, Sheridan has been a large consolidator in the anesthesia space.

What: Shares of Team Health Holdings (NYSE:TMH), a healthcare-focused staffing company, were up more than 15% in early trading today after the firm received a proposed merger offer from rival healthcare staffing firm AmSurg Corp (NASDAQ:AMSG). The proposed transaction would also create a continuum of care and broader geographic footprint, AmSurg said.

AmSurg noted it would expect a deal to close during the first quarter of 2016.

AmSurg, which owns outpatient surgery centers and a physician outsourcing division, released its letter to TeamHealth’s board of directors, led by Lynn Massingale.