Kindred increases borrowing capacity, aims to grow

Kindred Healthcare, the largest diversified post-acute provider in the U.S., is laying the groundwork to grow in the 15 metropolitan markets where its facilities provide integrated care.

The Louisville-based company announced Wednesday that it had amended its $750 million revolving credit facility and $785 million term loan in order increase its borrowing capacity and flexibility. Kindred CEO Paul Diaz said in a news release that those moves, along with the proceeds from selling assets outside those areas, “creates significant capital resources to expand our Integrated Care Markets and acquire additional home health and hospice operations, while still returning capital to our shareholders through a dividend.”

Earlier this month, Kindred reported that the company earned $1.7 million the three months ended June 3, a significant drop from the $15.5 million in net income in the same quarter last year. Revenue dropped to $1.41 billion from $1.42 billion for the second quarter of 2012.

During an earnings call Aug. 6, Diaz told analysts that the company would consider large acquisitions in addition to smaller pickups that complement its integrated care networks.

“We will be aggressive when we see those stars aligned where we think valuation, financing, cultures and teams match up and where we think we can bring value to an acquisition opportunity within the context of our Integrated Care Markets, and within the context of the enterprise capabilities that we have in our back office, in our IT shop and those kinds of things,” Diaz said.

Kindred's integrated care markets are Boston, Chicago, Cleveland, Dallas, Denver, Indianapolis, Houston, Las Vegas, Los Angeles, Louisville, Ky., San Diego, San Francisco, St. Louis, Seattle and Columbus, Ohio.

At end of July, Kindred sold seven nursing homes to Louisville-based Signature Healthcare for $47 million. That followed an announcement in April that it would sell 17 facilities, most of them transitional-care hospitals, to Mechanicsburg, Pa.-based Vibra Healthcare, for $187 million.