Kindred Acquires Rehab (KND, RHB)
Posted on 17 February, 2011 | No Comments
Under the deal, RehabCare stockholders will receive $26 in cash and 0.471 Kindred shares for each of their shares. Kindred plans to issue about 12 million shares in connection with the transaction. The deal also includes the assumption of about $400 million in debt.
That will award Rehab shareholders a 37.4% premium to the company’s closing share price on Monday of $25.47. Rehab shares have traded as high as $31.93 and as low as $15.88 over the past year. Kindred will receive financing from J.P. Morgan Chase, Morgan Stanley and Citigroup Inc. and also assume $400 million in RehabCare debt.
The deal will create the largest “post-acute” health company in the country, with more than $6 billion in revenue and operations in 46 states.
RehabCare posted fourth-quarter earnings of $17.1 million, or 69 cents a share, up from $655,000 or 3 cents a share, a year earlier. The year-earlier period included $7.2 million in charges related to its 2009 acquisition of Triumph Healthcare. Revenue jumped 36% to $339.3 million. Analysts had predicted a per-share profit of 61 cents on $344 million in revenue.
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