Gentiva To Buy Harden Healthcare In Cash And Stock

(RTTNews) - Gentiva Health Services, Inc. (GTIV), a provider of home health services and hospice services, Thursday said it entered into a definitive merger agreement to acquire Harden Healthcare Holdings, Inc., a provider of home health, hospice and community care services, for about $408.8 million in cash and stock.

The purchase price is $355 million in cash, and about $53.8 million in Gentiva shares. The deal's scheduled closure is in the fourth quarter. Gentiva plans to fund the cash portion of the deal using available cash and new credit facility.

The company expects the deal to add to the earnings within one year after closure of the deal. Expecting the transaction closes in the fourth quarter, the company anticipates combined 2014 revenues to be in the range of $2.1 billion to $2.2 billion and Adjusted EBITDA to be in the range of $210 million to $220 million, excluding the impact of equity-based compensation expense.

Pursuant to the agreement, Gentiva will acquire Harden's home health, hospice and community care businesses, and also become a preferred provider for Harden's 49 skilled nursing and assisted living facilities in Texas.

The combination is expected to create a company with 49 percent home health revenue, 41 percent hospice revenue and 10 percent community care revenue, Gentiva said. Gentiva added, "The percent of combined company Medicare revenues for the full-year 2012 would have been 72%, down from 86% for standalone Gentiva, thereby reducing the Company's Medicare exposure."