Kindred Healthcare Signs Definitive Agreement to Acquire Senior Home Care, an MTS Health Investors and Oaktree Capital Management Portfolio Company
LOUISVILLE, Ky.–(BUSINESS WIRE)–Nov. 4, 2013– Kindred Healthcare, Inc. (the “Company” or “Kindred”) (NYSE:KND) today announced that it has signed a definitive agreement to acquire Senior Home Care, Inc. (“Senior Home Care”), an MTS Health Investors and Oaktree Capital Management portfolio company, for a purchase price of $95 million. The Company expects to finance the transaction with operating cash flows and proceeds from its revolving credit facility.
Senior Home Care is a premier home health provider that operates through 47 locations in Florida and Louisiana. Senior Home Care currently generates annualized revenues of approximately $143 million. The Company expects that the transaction will be accretive to earnings in 2014.
More than half of Senior Home Care’s locations were named to the 2012 HomeCare Elite, a compilation of the top-performing home health agencies in the United States. This annual review identifies the top 25% of Medicare-certified agencies and further highlights the top 100 and top 500 agencies overall.
In Florida, Kindred currently operates 10 Transitional Care Hospitals (certified as long-term acute care (“LTAC”) hospitals) within Senior Home Care’s existing service areas. In Louisiana, Kindred currently operates one Transitional Care Hospital and, through its RehabCare division, five hospital-based acute rehabilitation units within Senior Home Care’s existing service areas.
The acquisition of Senior Home Care reflects another important step in the expansion of Kindred’s Care Management Division, which includes the Company’s home health business, Kindred at Home. Kindred continues to believe that innovation in the delivery of coordinated, high-quality care, in and across care settings, is critical and that this transaction further builds Kindred’s capabilities in these areas.
Senior Home Care is a leading provider of home health in Florida and Louisiana and Kindred is excited to partner with its seasoned and highly respected management team to continue to grow and deliver quality outcomes for the large and increasing number of patients in its markets (including over 4 million Medicare beneficiaries) who can benefit from its services. Now with a leading presence in key states including Texas, California, Florida and Ohio, Kindred at Home has approximately 200 sites of service across 13 states and a national presence that stretches coast-to-coast with over $350 million in annualized revenues.
The transaction is subject to regulatory approvals and other customary conditions to closing. The Company expects to close the transaction in the fourth quarter of 2013.
“This transaction provides us a tremendous opportunity to continue the expansion of our post-acute services in Florida and Louisiana and supports the growing interest among patients, physicians, hospital systems and public and private payors for high-quality, patient-centered integrated care,” said Paul J. Diaz, Kindred’s Chief Executive Officer.
Mr. Diaz added, “This transaction is another important example of how we are redeploying assets from our divestiture process and repositioning Kindred with a focus on our Integrated Care Markets and our Care Management Division, including Kindred at Home. We look forward to Senior Home Care’s team joining our organization and contributing their knowledge and expertise. We in turn believe we can provide our new colleagues with enhanced opportunities for professional growth and development within an organization that is mission and values driven, innovative and growing.”
“Senior Home Care’s unique platform is scalable and diversified,” said Benjamin A. Breier, Kindred’s President and Chief Operating Officer. “With a strong reputation built on patient service, clinical expertise and focused specialty programs, its platform includes a world class business software solution and experience with new care delivery and managed care models and features efficient operations and multiple growth opportunities. Senior Home Care’s business model is characterized by attractive margins and low capital intensity and fits well with our Continue the Care strategy in developing Kindred’s overall operations in a number of key Integrated Care Markets in Florida.”
Mr. Breier continued, “Amidst continued changes in health services broadly and the home health sector specifically, Kindred at Home, under the Care Management Division, is aggressively pursuing both strategic and operational initiatives, as evidenced by this transaction, that will enable the business to succeed and be well positioned today and in the future.”
About Kindred Healthcare
Kindred Healthcare, Inc., a top-125 private employer in the United States, is a FORTUNE 500 healthcare services company based in Louisville, Kentucky, with annual revenues of approximately $6 billion and approximately 72,000 employees in 46 states. At June 30, 2013, Kindred through its subsidiaries provided healthcare services in 2,167 locations, including 116 transitional care hospitals, six inpatient rehabilitation hospitals, 169 nursing centers, 24 sub-acute units, 105 Kindred at Home hospice, home health and non-medical home care locations, 103 inpatient rehabilitation units (hospital-based) and a contract rehabilitation services business, RehabCare, which serves 1,644 non-affiliated facilities. Ranked as one of Fortune magazine’s Most Admired Healthcare Companies for five years in a row, Kindred’s mission is to promote healing, provide hope, preserve dignity and produce value for each patient, resident, family member, customer, employee and shareholder we serve. For more information, go to www.kindredhealthcare.com. You can also follow us on Twitter and Facebook.
MTS Health Investors, LLC, located in New York, is a healthcare private equity firm that makes investments in operating companies within the healthcare industry. MTS targets companies that provide cost-effective solutions in the services and low-technology manufacturing sectors of the healthcare industry. Industry sectors in which MTS invests include: providers of outsourced solutions to the healthcare industry; providers of direct medical services to patients in an institutional, ambulatory, or home setting; providers of managed care and other healthcare insurance services; distributors of medical products; and manufacturers of medical devices and supplies. For further information, please visit www.mtshealthinvestors.com.
Oaktree Capital Management, L.P. is a leading global investment management firm focused on alternative markets, with over $81 billion in assets under management as of September 30, 2012. The firm emphasizes a contrarian, value-oriented investment philosophy across investment strategies in six asset classes: distressed debt, corporate debt, control investing, convertible securities, real estate and listed equities. Oaktree’s institutional clients include 75 of the 100 largest U.S. pension plans, 40 states in the United States, approximately 400 corporations, over 300 university, charitable and other endowments and foundations, and over 250 non-U.S. institutional investors, including 10 sovereign wealth funds. Oaktree was formed in 1995 by a group of principals who have worked together since the mid-1980s. Headquartered in Los Angeles, the firm today has over 700 employees and offices in 13 cities worldwide. For further information, please visit www.oaktreecapital.com.