Drea Knufken
Home health care provider Gentiva is buying hospice company Odyssey HealthCare for $912 million. The merger will create the largest home health care/hospice company in the nation. The New York Times has more:
The companies said the deal will create a hospice care provider with an average daily patient census of about 14,000 and operations in 30 states. They anticipate the combination will create a company with more than $1.8 billion in annual revenue. Gentiva, based in Atlanta, said it would pay $27 a share for Odyssey stock. Based on Odyssey’s 33.8 million shares outstanding at March 31, the deal is valued at $912.3 million. Odyssey is based in Dallas.
The boards of both companies have approved the acquisition, which is expected to close in the third quarter, pending approval by regulators and Odyssey stockholders.
Last week, Gentiva acquired the United Home Care Group, a home health and hospice service company based in Louisiana. Terms of the deal were not disclosed, but Gentiva said it can now provide services to about 85 percent of the state of Louisiana.
The Wall St. Journal provides some more background:
The deal comes in the wake of scrutiny in the home-health sector, not only because of billing practices and the potential effects of the federal health-care overhaul. Gentiva is among the companies that recently received a letter from the Senate Finance Committee, which is questioning whether the companies deliberately increased the number of times they sent caregivers to patients’ homes in order to trigger higher Medicare reimbursement payments.
Investigation or not, Gentiva is positioned well to take care of the upcoming waves of aging boomers.
