A major news in the healthcare industry currently is the take
over of Harden Healthcare Holdings Inc. by leading health and
hospice services provider,
Gentiva Health Services Inc.
) within the stipulated time. The deal was initially announced in
Sep 2013 and was scheduled to culminate in the fourth quarter of
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The total purchase consideration equated to $408.8 million, out
of which $355 million was paid in cash and the remaining $53.8
million in Gentiva common stock. The cash portion of the
transaction was funded by available cash and a new credit
facility. Additionally, Gentiva issued a new $825 million term
loan facility to finance the transaction and also to refinance
the company's existing term loans.
With the culmination of the deal, Gentiva will now acquire the
home, health, hospice and community care business of Harden.
Gentiva will now function as the preferred provider for the 49
skilled nursing and assisted living facilities of Harden in
Texas. Additionally, Harden employees will be joining Gentiva.
The merger of the two companies has created an entity that will
have home health accounting for 49% of total revenues, hospice
for 41% and community care for 10%.
The acquisition is expected to enhance the Medicare exposure of
Gentiva, boost 2014 revenues to a range of $2.1 billion to $2.2
billion and enhance the long-term growth of the company. Owing to
the increasing healthcare needs of the aging population and the
existing rate pressures, the healthcare industry provides ample
growth opportunities at present. With the acquisition of Harden,
a leading post-acute care provider, we expect Gentiva to prosper
in this field and position itself as a leader. Also, Gentiva's
portfolio should expand as it will be in a position to offer its
services to the dual eligibles.
Acquiring a complementary company is always beneficial as it
endows the acquirer with the opportunity to curb competition to
some extent as well as gain on the acquired company's resources.
Harden has been operating in 13 states with a considerable
customer base. Thus, this strategic acquisition should be
beneficial in leveraging Gentiva's operations and curbing
Among other take over deals over the last couple of months,
Quest Diagnostics Inc.
) acquisition of ConVerge Diagnostic Services, LLC this month and
the culmination of the acquisition of Ohio-based CarePoint
Partners Holdings and its subsidiaries by
) in August are worth mentioning.
Gentiva currently carries a Zacks Rank #3 (Hold). Among other
stocks in the healthcare industry,
) carries a favorable Zacks Rank #1 (Strong Buy).