Kindred Healthcare Inc. (KND) has agreed to acquire RehabCare
Group Inc. (RHB) for close to $900 million, which the companies
said would create the country's largest post-acute healthcare
services company.
Such services involve the care provided after that given
immediately following a life threatening condition. The combined
company would operate 118 long-term acute care hospitals with 8,492
licensed beds, 226 nursing and rehabilitation centers with 27,442
beds and 121 inpatient rehabilitation hospitals.
Under the deal, RehabCare stockholders will receive $26 in cash
and 0.471 Kindred shares for each of their shares. Kindred plans to
issue about 12 million shares in connection with the transaction.
The deal also includes the assumption of about $400 million in
debt.
Kindred believes the acquisition will immediately give a healthy
boost to earnings. It is subject to approval by shareholders and
regulators and expected to close on or about June 30.
Meanwhile, Kindred reported a profit of $20.4 million, or 52
cents a share, up from $19.3 million, or 49 cents a share, a year
earlier. Revenue rose 6.1% to $1.14 billion.
Analysts polled by Thomson Reuters had expected earnings of 43
cents on $1.12 billion in revenue.
RehabCare posted fourth-quarter earnings of $17.1 million, or 69
cents a share, up from $655,000 or 3 cents a share, a year earlier.
The year-earlier period included $7.2 million in charges related to
its 2009 acquisition of Triumph Healthcare. Revenue jumped 36% to
$339.3 million.
Analysts had predicted a per-share profit of 61 cents on $344
million in revenue.
Kindred shares were up 1.1% at $19.69 in recent premarket
trading. RehabCare was inactive after finishing at $25.47, compared
with the $35.18 offer price.
-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240;
matthew.jarzemsky@dowjones.com
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