Amedisys, Inc. (the “Company” or “Amedisys”) (NASDAQ: AMED), America’s leading independent home health, hospice and personal care company, has closed on its acquisition of Compassionate Care Hospice, a hospice provider headquartered in Parsippany, New Jersey, with 2,300 employees and 53 locations nationwide.
Under the terms of the agreement, Amedisys acquired 100 percent of the ownership interests in Compassionate Care Hospice for a fixed price of $340 million, which is inclusive of $50 million in payments related to a tax asset and working capital.
“I am excited to welcome the employees of Compassionate Care Hospice to the Amedisys family,” stated CEO and President Paul Kusserow. “This acquisition allows us to substantially expand our hospice footprint, care for more patients, and together continue to provide best-in-class care to all patients we serve. We look forward to immediately beginning integration of our operations and services and will update everyone on our 2019 outlook for the business during our upcoming earnings call.”
As disclosed in the Company’s October 10, 2018 press release announcing the acquisition, Compassionate Care Hospice generates approximately $188 million in annual revenues, with an adjusted EBITDA of $27 million.
With this transaction, Amedisys now cares for more than 11,000 hospice patients daily in 33 states, operating 137 hospice care centers and making it the third largest hospice provider in America. In total, the Company now has 472 care centers in 38 states and the District of Columbia.
The Company also expanded its borrowing capacity by $175 million to $725 million, consisting of a $550 million revolving credit facility and a $175 million term loan. The initial pricing will represent an interest rate reduction of 25 basis points compared to pricing under the previous credit facility. Upon closing of the Compassionate Care Hospice acquisition, the Company will have approximately $350 million of liquidity available.
“I would like to thank our partners in our banking syndicate whose commitments and support will allow us to continue executing upon our inorganic growth strategy,” said CFO Scott Ginn. “We look forward to putting this additional capital to use in the coming year.”
The Company plans to utilize the proceeds from the upsized facility to fund the purchase of Compassionate Care Hospice and provide additional liquidity to capitalize on an active pipeline of acquisition opportunities. The lender syndicate of ten banks was led by Bank of America Merrill Lynch, as Administrative Agent and Joint Bookrunner, JPMorgan Chase Bank, N.A., as Co-Syndication Agent and Joint Bookrunner and Fifth Third Bank and Citizens Bank, N.A., as Joint Lead Arrangers.
Kantrow Spaht Weaver & Blitzer (APLC) served as legal counsel for Amedisys and Lowenstein Sandler LLP served as legal counsel for Compassionate Care Hospice for the purposes of this acquisition.
