Kindred Healthcare, Inc., and RehabCare Group, Inc., today announced the signing of a definitive merger agreement under which Kindred will acquire RehabCare for around $900 million in cash and stock. This transaction will create the largest post-acute healthcare services company in the United States with more than $6 billion in annual revenues and operations in 46 states, according to the companies.
The combined healthcare providers will operate 226 nursing and rehabilitation centers with 27,442 licensed beds; 118 long-term acute care hospitals with 8,492 licensed beds; 121 inpatient rehabilitation hospitals (primarily hospital-based units); and 1,808 hospital, nursing center, and assisted living rehabilitation therapy services contracts across the country.
“We are particularly excited about the opportunity to add RehabCare’s services in our cluster markets and inpatient rehabilitation services to our service offerings,” Kindred President and CEO Paul J. Diaz said in a release. “Together with our growing home care and hospice businesses, the merger offers our patients an expanded continuum of services and the opportunity for us to ‘continue the care’ for our patients and residents through an entire episode of treatment and recovery.”
Kindred expects the combined company to achieve operating synergies of approximately $40 million within a period of two years following the acquisition, with $25 million expected in the first year after closing.
The acquisition is subject to certain conditions, including approvals by stockholders of both companies. The pending transaction will be completed on or about June 30, according to a release.