Gentiva Health Services to Pay $1B for Odyssey HealthCare
Home healthcare provider Gentiva Health Services, Inc. announced today that it will pay $1 billion for hospice provider Odyssey HealthCare, Inc., in an all-cash transaction valued at $27 per share.
Atlanta-based Gentiva said in a release that the acquisition will create the largest hospice and home healthcare providers in the nation, operating in 30 states with an average daily patient census of 14,000. Based on the two companies' fiscal 2009 financials, the merged companies anticipate more than $1.8 billion in annual revenue, comprised of 60% in home healthcare revenue and 40% in hospice revenue.
"The combination of the two companies clearly positions us as a leader in both home health and hospice care in the United States," said Gentiva CEO/President Tony Strange, in a prepared statement. "The two companies share similar geography between Gentiva's home health operations and Odyssey's hospice operations, with very little overlap between the two companies' hospice programs."
Odyssey President/CEO Robert A. Lefton said the two companies operate "complementary businesses that are positioned for continued leadership in the hospice industry. We believe Gentiva shares our commitment for compassionate, personalized care, and we look forward to better serving our patients and their families with the enhanced resources and depth of the combined company."
The deal was unanimously approved by both companies’ boards, and Odyssey’s board recommended that shareholders approve the acquisition. The deal is expected to close in the third quarter of 2010, subject to standard closing conditions. Gentiva will raise $1.1 billion in new debt to fund the purchase and to refinance existing debt, and expects the deal to be accretive to adjusted earnings per share, exclusive of one-time costs, within the first year after closing.