The cash-and-stock deal is valued at $1.8 billion, which includes Gentiva's approximately $1.1 billion of debt. Kindred will pay $19.50 per share to Gentiva shareholders, 17% higher than Gentiva's trading value on Wednesday. It's also more than double Gentiva's stock price of $8.54 from May, before Kindred made an offer. The deal includes $14.50 per share in cash and $5 of Kindred common stock.
Gentiva began seriously considering Kindred's advances in July, when Kindred said it would pursue a full acquisition of Gentiva at $17.25 per share. Kindred's offer at the time came in response to a new mystery bidder—only described as a “recognized owner, operator and investor in the sector,” which fueled speculation that a private-equity firm was the new suitor.
Kindred said once the deal closes, it will be the fourth-largest healthcare employer in the U.S. The combined company will have 109,000 employees in hundreds of long-term acute-care hospitals, inpatient rehabilitation facilities, skilled-nursing facilities and hospices.
“Over the last eight weeks, we undertook a robust due diligence process and worked closely and constructively with our counterparts at Gentiva to better understand their operations, financial results and outlook,” Kindred CEO Paul Diaz said in a release. “This process confirmed the compelling strategic rationale and industrial logic of this combination, as well as our belief that this transaction is in the best interests of both companies and our respective shareholders, patients, employees and business partners.”
