Gentiva Health Services is (NASDAQ: GTIV) further bolstering its position as a home care provider through the $409 million purchase of Harden Healthcare, announced today.
The acquisition will add Harden’s home health, hospice and community care businesses to Gentiva’s portfolio, which the company has grown in recent months to solidify its position in the market for home care.
Austin-based Harden Healthcare spans operations in 13 states with a large presence in Texas. The company’s 2012 consolidated revenue was $476 million, according to company filings. Under the merger agreement, Gentiva will become a preferred provider for Harden’s 49 skilled nursing and assisted living facilities in Texas.
“This transaction is a great strategic fit for Gentiva and we believe it will provide significant long-term value for our shareholders,” said Gentiva Executive Chairman Rod Windley. “I consider the Harden transaction a milestone in the continued Gentiva growth story. The increasing healthcare needs of an aging population and ongoing rate pressures will fuel industry consolidation and Gentiva is positioned to be a leader in this effort.”
Gentiva will fund the purchase with $355 million in cash and approximately $53.8 million in Gentiva common stock. The company says it expects to fund the cash portion of the purchase price through available cash and a new credit facility and will raise a new $855 million term loan facility to fund the transaction and refinance existing term loans.
Current Harden Chairman Steve Hicks will join the Gentiva board upon the closing of the deal.
The Company said it expects the acquisition to be accretive to adjusted income per share, exclusive of one-time costs, within the first year after the closing of the merger. With a projected close date in 2013, the Company said it expects combined 2014 revenues to be in the range of $2.1 billion to $2.2 billion and adjusted EBITDA to be in the range of $210.0 million to $220.0 million.
Written by Elizabeth Ecker