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Kindred Healthcare on the block: Reuters
Posted on Friday, 21 April 2017 11:34
Nasdaq-listed hospital operator Kindred Healthcare is working with investment banks to explore a sale, Reuters reported, citing people familiar with the matter.
Potential suitors could include insurance carrier Humana, as well as private equity investors Apollo Global Management and Blackstone Group, the sources added.
Following the news, Kindred Healthcare’s shares rose 8.5 per cent to close at USD 8.95 apiece on 20th April, valuing the company at about USD 766.85 million.
Reuters observed that the transaction came amidst the increasing pressure for hospice providers to reduce exposure to federal insurance programme Medicare, which US president Trump is planning to reform.
Kentucky-based Kindred Healthcare employs about 100,100 staff in over 2,654 locations across 46 states.
It operates 82 long-term acute care hospitals and 19 inpatient rehabilitation centres, as well as offering home nursing services.
The company reported revenues of USD 7.22 billion in 2016, an increase of 2.4 per cent over USD 7.05 billion in the year before, while its net loss rose sevenfold to USD 664.23 million.
Kindred Healthcare spent USD 1.80 billion to take over debt-ridden home care provider Gentiva Health Services in 2015 in a bid to expand its geographical network.
In the earnings announcement released in February, the group expressed the intention to divest its skilled nursing centre business to fetch between USD 100.00 million to USD 300.00 million in cash to repay debts, which stood at USD 3.22 billion as at 31st December last year.
According to Zephyr, the M&A database published by Bureau van Dijk, there have been 17 deals targeting US hospital operators in 2017.
The largest transaction of these is UnitedHealth’s acquisition of Illinois-based Surgical Care Affiliates for about USD 3.60 billion announced in January.
© Zephus Ltd