Inside Kindred’s Winning Bid for Arkansas’ Home Health

Since Kindred Healthcare Inc. (NYSE: KND) acquired the home health operations of the Arkansas Department of Health for $39 million, questions remain about how much the company initially proposed to pay in the state’s first bidding round.

Kindred beat out five other companies in a competitive bidding round for Arkansas’ operations, which provide care to roughly 3,380 patients and and employ approximately 280 regular state employees and 1,500 contract employees. However, Louisville, Kentucky-based Kindred won’t reveal how much it proposed to buy the state-run business in the first round.

Kindred, which has annual revenue of approximately $7.2 billion and is the largest home health provider in the nation, already had a presence in the state. The acquisition expands Kindred’s reach in Arkansas to providing home health, hospice and personal care services to 70 of the state’s 75 counties.

The five other bids were significantly lower than the final $39 million, which was announced as a secondary, negotiated winning bid, according to the Arkansas Democrat Gazette, which obtained the other bid figures in a request for information under the Arkansas Free of Information Act.

The other five proposed payments were:

—$22.5 million, Home I.V. Specialists

—$14.8 million, Amedisys Inc. of Baton Rouge

—$10.145 million, Arkansas Post Acute Care LLC of Fort Smith

—$4 million, Hospice Home Care Inc. of Little Rock

—$3 million, Arkansas Hospice Inc. of North Little Rock

Both Hospice Home Care Inc. of Little Rock and Arkansas Hospice Inc. of North Little Rock proposed buying only the state’s hospice part of its program, according to the Arkansas Democrat Gazette.

The Arkansas Department of Health declined to disclose Kindred’s initial bid, according to Arkansas Democrat Gazette, citing the bid could be proprietary information should the company decide to attempt potential takeover bids in the future.

However, Kindred’s bid had the highest overall rating from the department’s evaluator, the newspaper reported. The acquisition was met with some backlash soon after its announcement, as some Arkansans reportedly worried about continued care access within rural parts of the state as well as job security for some of the state’s employees.

Arkansas did “negotiate down” with Kindred from its initial bid, though the negotiations were largely related to the program’s financials, according to the Arkansas Democrat Gazette. The initial bid was even higher, according to the Louisville Business Journal.

Written by Amy Baxter