Long-term care provider Kindred Healthcare, Inc. (NYSE:KND) announced on Monday that it had signed a definitive agreement to acquire home healthcare provider IntegraCare Holdings, Inc., a portfolio company of private equity firm Flexpoint Ford LLC, for a purchase price of $71 million in cash plus up to $4 million more based on 2013 earnings.
The transaction will be financed with operating cash flows and proceeds from Kindred’s revolving line of credit; IntegraCare will have no outstanding long-term debt at closing.
IntegraCare provides home health, hospice, and community services and operates in 47 locations across Texas. The company currently generates annualized revenues of approximately $71 million with an EBIDTA of approximately $9 million.
Kindred currently operates three nursing and rehabilitation centers, nine long-term acute care hospitals, three inpatient rehabilitation facilities, and one hospital-based sub-acute unit within IntegraCare’s existing service areas. The transaction provides an expansion platform into additional markets throughout the south of Texas, including the Houston market where Kindred already has a large presence.
“This transaction will add further size and scale to our growing home health and hospice business. With IntegraCare, our home health and hospice division will have a revenue run rate in excess of $200 million and over 100 locations,” said Paul Diaz, CEO of Kindred, in a statement. “We believe that the continued expansion of our continuum of post-acute care services in our key cluster markets supports the growing interest among patients, physicians, hospital systems and public and private payors for high-quality, patient-centered integrated care.”
Kindred expects the transaction to close by the end of the third quarter of 2012; it is still subject to several regulatory approvals and other conditions. The acquisition is expected to result in a slight gain to Kindred’s earnings in 2012, and $0.07 and $0.09 per diluted share gain to earnings in 2013.
Written by Alyssa Gerace