Almost Family and LHC Group to Merge in $2.4 Billion Transaction

Two home health care heavyweights have announced they plan to join forces to create the second largest home health care provider in the nation.

Louisville, Kentucky-based Almost Family, Inc. (Nasdaq: AFAM) and Lafayette, Louisiana-based LHC Group, Inc. (Nasdaq: LHCG) on Thursday revealed that they have agreed to combine in an all-stock merger of equals transaction, pursuant to a definitive merger agreement unanimously approved by each company’s Board of Directors.

The deal is expected to close in the first half of 2018 and result in company with a combined revenue of $1.8 billion. The implied transaction value is $2.4 billion, according to LHC Group.


The combined organization, which will trade on the Nasdaq under the symbol “LHCG” and be headquartered in Lafayette, Louisiana, will have 781 locations in 36 states and over 31,000 employees.

To put the scale of the new, combined entity in perspective, Louisville-based Kindred Healthcare (NYSE: KND), which has been identified as the nation’s largest home health provider, operated 379 home health and 180 hospice locations in 2016, with revenues of $2.5 billion, according to a company presentation.

LHC Group Chairman and CEO Keith Myers (pictured above) will serve as chairman and CEO of the combined company, while William Yarmuth, Almost Family’s current chairman and CEO, will stay on as a special advisor. Steve Guenthner, CFO of Almost Family, will take on the role of chief strategy officer.


Post-merger, LHC Group shareholders will own 58.5% of the combined company, and Almost Family shareholders will own 41.5%.

The two different organizations’ shared vision and support of value-based reimbursement helped pave the way for the merger, Myers said in a press release.

“William Yarmuth and I have worked closely together on many of the important issues our industry has faced over the years, including the most recent home health advocacy with CMS, Office of Management and Budget and Congress,” Myers said. “Almost Family shares our vision for making a difference in the communities we serve by delivering quality, outcomes-focused, patient-centered care to the most vulnerable in society. This merger is truly a transformative event for both our companies and our patients nationwide and a unique opportunity to bring more than 30,000 dedicated and talented employees together to lead the in-home health care industry’s transition to value-based reimbursement and highly coordinated care.”

The companies have identified pre-tax run-rate cost synergies of $25 million, and say the deal should be immediately accretive.

Jefferies LLC is serving as LHC Group’s financial advisory and Alston & Bird LLP is serving as legal advisor. Guggenheim Securities, LLC is serving as Almost Family’s financial advisor, while Gibson, Dunn & Crutcher LLP is acting as its legal advisor.

Written by Mary Kate Nelson

Companies featured in this article: