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LHC Group, Almost Family will merge, forming second-largest home health provider in U.S.

Nov 20, 2017

LHC Group, Almost Family will merge, forming second-largest home health provider in U.S.
Lafayette, La.-based LHC Group and Louisville, Ky.-based Almost Family announced last Thursday that they have agreed to combine the two companies in an all-stock “merger of equals” transaction valued at $2.4 billion.

The resulting entity will have 781 locations in 36 states, more than 31,000 employees and revenue of $1.8 billion, the companies said in a press statement, noting that the merger will put them in the position to “lead the industry’s transition to value-based reimbursement and highly coordinated care.”

Though Kindred Healthcare has fewer locations, its Kindred at Home division had revenue of approximately $2.5 billion in 2016, making it the nation’s largest home health provider. Kindred achieved the top spot by acquiring Gentiva in 2015 for $1.8 billion in cash and stock.

The definitive merger agreement calls for Almost Family shareholders to receive 0.915 shares of LHC Group for each share of Almost Family stock they hold. Once the merger has been completed, LHC Group shareholders will own 58.5 percent of the new company and Almost Family shareholders will own the remaining 41.5 percent.

Keith Myers, who currently serves as chairman and CEO of LHC Group, will hold the same roles in the combined company. Almost Family’s president and CEO, William Yarmuth, will serve as a special adviser.

“The complementary nature of our two firms provides incredible fit, adding clinical, operational and financial strength and depth without any meaningful conflicts or overlaps in management, geography and service capabilities,” Yarmuth said in the press statement.

The home office of the new company will be in Lafayette, while Personal Care Services, Healthcare Innovations and other support services will operate out of Louisville.

Pending regulatory approval and customary closing conditions, the transaction is expected to close by mid-2018. The boards of both companies unanimously approved the merger.

Our Take: For our readers unfamiliar with the industry, LHC Group and Almost Family are two of the most respected players in home health care. And LHC’s chairman and CEO, Keith Myers, is arguably the industry’s most respected voice. Through continued acquisitions in the coming years, look for the newly combined company to overtake Kindred’s leading position by 2020.

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