Kindred Announces Agreement to Acquire Integra Holdings
Discussions about the future have certainly included mergers and acquisitions within the current home care provider community. We also know there might be players who have not previously been in the home health arena seizing the opportunity present with ACOs, post-acute bundling, value based purchasing and other future programs aimed at reducing costs by achieving economies of scale. An example of that scenario item played out today as the article from the 4 Traders website illustrates.
Kindred Healthcare has been in the post-acute market with LTACs, IRFs, and sub-acute units, but according to the story has not been in home care. Their acquisition of IntegraCare is an indication of a change in strategy. We will likely have the more predictable acquisitions of providers by large home care companies, hospitals being more active in home health, and mergers of large and small home care companies. But we will also see other entities, healthcare and perhaps those who have not been in our arena, seeking to acquire quality home health providers. This approach may assist them in removing barriers and silos that currently exist in our space allowing for a more efficient and effective operation in the post-acute part of the healthcare continuum. So we now have another variable to add for our strategic forethought. You can click on the title hyperlink or ‘the article’ to get the full story. But here are the first two paragraphs to give you a teaser.
“Today, Kindred Healthcare, Inc. (NYSE:KND) announced it signed a definitive agreement to acquire IntegraCare Holdings, Inc. (“IntegraCare”), a portfolio company of private equity firm Flexpoint Ford, LLC, for a purchase price of $71 million in cash plus a potential $4 million cash earn out based on 2013 earnings. The Company expects to finance the transaction with operating cash flows and proceeds from its revolving credit facility. IntegraCare will have no outstanding long-term debt at closing.
IntegraCare is a high-quality provider of home health, hospice and community services which operates 47 locations across Texas. IntegraCare currently generates annualized revenues of approximately $71 million and earnings before interest, income taxes, depreciation and amortization of approximately $9 million. The Company expects to achieve annualized synergies of approximately $1.5 million once the integration of IntegraCare is fully completed in 2013. Kindred currently operates three nursing and rehabilitation centers, nine long-term acute care (“LTAC”) hospitals, three inpatient rehabilitation facilities (“IRFs”) and one hospital-based sub-acute unit within IntegraCare’s existing service areas and the transaction will provide a platform for organic expansion into additional markets throughout the south including the Houston market where Kindred has a large market presence.
Warren Hebert, RN, CAE
RWJF Executive Nurse Fellow ’06-’09
Chief Executive Officer
