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Kindred Healthcare launches hostile takeover bid for Gentiva Health Services

Louisville, Kentucky based Kindred Healthcare yesterday (5-15-14) announKindred Logoced a bid to buy all of the outstanding shares of common stock of home health giant Gentiva Health Services.  This comes after a merger offer by Kindred was rejected by Atlanta based Gentiva’s board of directors.  This value of the purchase, including assumption of Gentiva’s debt, would be $1.6 billion according to Kindred.

Gentiva’s stock price exploded with the announcement, going up 63% in the first couple hours of trading.

Kindred is the largest post-acute care provider in the U.S., reporting first quarter revenue of $1.3 billion, a 2% increase over the year-ago quarter. The company’s strategy includes a commitment to growing its Care Management division, which houses home health and hospice operations.

Gentiva is the nation’s largest provider of home health and hospice services. It reported revenue of $487.5 million for the first quarter, an increase of 17% over first quarter 2013, and is expecting net revenue of from $1.9 billion to $2.1 billion for 2014. It acquired private Harden Healthcare Holdings Inc. last September for about $409 million.

The combined company would:

  • Serve nearly 127,000 patients per day;
  • Operate in 47 states;
  • Employ approximately 110,000 individuals, making it the 78th largest private employer in the United States;
  • Deliver pro forma annual revenues of approximately $7.2 billion; and
  • Generate pro forma EBITDAR of nearly $1 billion.
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