Gentiva Health Services Inc.
) announced the acquisition of North Mississippi Hospice for an
undisclosed price. While the financial terms of the deal were not
divulged, Gentiva revealed that it will finance the purchase from
its cash reserves.
The transaction is unlikely to materially affect Gentiva's
earnings in the future. However, it will significantly expand the
company's presence in the Northern Mississippi market as North
Mississippi Hospice has branches in Tupelo, Oxford and Southaven in
Mississippi. The hospice provider, which was founded in 2006, is
based in Oxford, Mississippi.
Gentiva has been using its cash reserves to support its
inorganic growth strategy and has been on an acquisition spree in
the recent times. North Mississippi Hospice is the third
acquisition announced in this quarter.
Earlier this month, Gentiva announced that it has purchased the
home health and hospice operations of Washington-based Family Home
Care Corporation. Previously, in July 2012, the company announced
the acquisition of Indiana-based Advocate Hospice, a leading
provider of end of life care.
These acquisitions are aimed at expanding Gentiva's operating
scale as well as its geographic coverage. While the purchase of
Family Home Care will expand the company's foothold in the eastern
Washington and northern Idaho markets, the acquisition of Advocate
Hospice will expand its coverage in central and southern Indiana
and leverage its existing hospice and home health facilities in the
state. However, similar to the case of North Mississippi Hospice,
these acquisitions are not expected to have a material impact on
Gentiva, which competes with
), carries a Zacks #2 Rank, translating into a short-term Buy
rating. We maintain a long-term 'Outperform' recommendation on the
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