Almost Family Secures Credit, Approvals for Community Health Deal
Almost Family (Nasdaq: AFAM) is putting the final pieces in place to acquire an 80% ownership stake in the home health operations of major hospital company Community Health Systems (NYSE: CYH).
The Louisville-based home health provider has entered into a new five-year, $350 million revolving credit facility, and also has cleared the necessary regulatory approvals for the CYH transaction, the company announced Monday.
“Both of these accomplishments will allow us to close on the transaction by the end of the year,” CEO William Yarmuth said in a press release.
Specifically, Almost Family expects to fund the $128 million CYH venture as of Dec. 30 and take over control of operations as of Dec. 31. This is the first day of Almost Family’s 2017 fiscal year.
The credit facility includes an accordion feature to increase total commitments to $500 million. J.P. Morgan Securities LLC acted as lead book-runner and arranger, and Bank of America acted as joint lead arranger. Fifth Third Bank and Regions Bank also are involved, and the facility adds CapitalOne to AFAM’s list of credit providers.
Almost Family can utilize the credit facility for general corporate purposes, including acquisitions. However, the company does not anticipate completing any acquisitions other than the CYH deal during the fourth quarter of 2016.
The new credit facility replaces Almost Family’s previous $175 million credit facility. It is secured by substantially all the company’s assets and the stock of its subsidiaries.
The Community Health Systems transaction will create the largest public home health-hospital joint venture in the nation, bringing Almost Family into 10 new states and making it the third-largest home health provider in the country.
New payment models such as accountable care organizations (ACOs) have been tying Medicare dollars to greater coordination between acute and post-acute providers. Almost Family has become involved in these new frameworks, and recorded $4.3 million in third-quarter 2016 revenue from an incentive payment to its Imperium ACO-enablement subsidiary, part of the Medicare Shared Savings ACO program.
Written by Tim Mullaney