Kindred Healthcare, a post-acute care services provider based in Louisville, Ky., and Atlanta-based home health and hospice services provider Gentiva Health Services have reached a definitive merger agreement.
The boards of both companies have unanimously approved the agreement, under which Kindred will acquire Gentiva in a transaction valued at $1.8 billion, including the assumption of net debt. Gentiva shareholders will receive $14.50 per share in cash and $5.00 of Kindred common stock.
The proposed merger still requires regulatory approval. Kindred and Gentiva expect the transaction to close in the first quarter of 2015. The combined organization would serve more than 1 million patients annually in 47 states and have pro forma annual revenues of approximately $7.1 billion.
This past May, Kindred extended an unsolicited offer to acquire Gentiva in a $1.6 billion transaction. The original acquisition proposal would have involved Kindred acquiring all of the outstanding shares of common stock of Gentiva for a combination of $7.00 per share cash and $7.00 of Kindred common stock. Gentiva's board turned down that offer on the grounds that it undervalued the company, would improve Kindred's operations at the expense of Gentiva stockholders and would exploit a temporary decrease in Gentiva's stock price. Additionally, Gentiva's financial advisers, Barclays and Edge Healthcare Partners, deemed the original offer inadequate.