Post-acute-care company Kindred Healthcare has signed definitive agreements to acquire five long-term acute-care hospitals from Vista Healthcare for $180 million in cash, and three nursing and rehabilitation centers in the Dallas-Fort Worth area from Meridian Senior Properties for $38 million.
Kindred signs agreement to acquire facilities in California and Texas
Kindred will buy from Rancho Cucamonga, Calif.-based Vista four freestanding hospitals and one hospital-within-a-hospital; the five California facilities total 250 beds. The assets generate annualized revenues of about $150 million and earnings before interest, income taxes, depreciation and amortization (EBITDA) of about $27 million, according to a company news release. This deal is expected to close in the fourth quarter.
In Texas, Kindred will expand its presence in the Dallas-Fort Worth region—where the company currently operates six hospitals and is developing a co-located, hospital-based, subacute unit—by purchasing three recently constructed nursing and rehabilitation centers that have a total of 405 beds from Meridian Senior Properties, Dallas. The facilities currently generate annualized revenues of about $24 million and EBITDA of about $3 million, Kindred said. That transaction is expected to close by the end of the third quarter.
Louisville, Ky.-based Kindred said it expects to incur transition costs in the range of $6 million to $8 million within the first year following the transactions. Excluding these costs, Kindred said it expects the deals to be slightly accretive to earnings in 2010.
Kindred President and CEO Paul Diaz said in the news release that the Vista deal will allow the company to meet growing demand and expand its hospital operations in Southern California. "The Vista hospitals also provide several clinical offerings not currently available in our area hospitals, providing us with an opportunity to expand our clinical services as well as attract more commercial and managed-care business," Diaz said, adding that Vista employees will join Kindred.
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