27 November 2017

LHC to purchase Almost Family

LHC has announced it will acquire Almost Family in an all-stock deal worth USD 2,400 million. The buyer has offered to pay USD 60.88 per share, representing a 15.6 per cent premium over the target’s close on 15th November 2017, the last trading day prior to the deal being announced.

While the transaction has been unanimously approved by the boards of both companies, it remains subject to approvals from the US Department of Justice and the Federal Trade Commission. Under the terms of the merger, the shareholders of LHC will own 59 per cent of the combined company, with Almost Family’s owners holding the balance of 41 per cent.

Based in Louisville, Kentucky, Almost Family specialises in nursing, physical rehabilitation, custodial and person care services, as well as long term care assessments for accountable care organisations. Lafayette-headquartered LHC is a provider of post-acute healthcare services catered to Medicare beneficiaries in the US. The buyer operates through four segments: home health and hospice, as well as community and facility-based services.

According to Zephyr, the M&A database published by Bureau van Dijk, this is LHC’s largest investment to date. The transaction is also the second-largest acquisition with a target in the home care services sector on record, after the USD 4,600 million takeover of Lincare Holdings by Linde in 2012.

The merger of the two Nasdaq-listed healthcare services providers will create a group with combined revenue of USD 1,800 million and adjusted earnings before interest, tax, depreciation and amortisation of about USD 145 million for the 12 months ended 30th September 2017. The entity will also have 31,000 employees in 781 locations spanning 36 US states.

Commenting on the transaction, Almost Family’s chairman and chief executive, William Yarmuth, said: “In my opinion, we are combining two of America’s most successful home healthcare companies to create what will be the best-run, best-positioned in-home healthcare company in America.” He added: “The complementary nature of our two firms provides incredible fit, adding clinical, operational and financial strength, and depth without any meaningful conflicts or overlaps in management, geography, and service capabilities.”

This is not LHC’s first deal this year as it agreed just a few months ago to form a home care, hospice and hospital operating joint venture with Texas-headquartered healthcare firm Christus Health. Last year, it also successfully acquired the assets of Heartlite Hospice to further expand its business.

Zephyr shows there have been 62 other deals targeting home healthcare services providers announced worldwide since the beginning of this year. The most valuable of these was worth around GBP 300 million and involved the sale of 122 care homes to HC-One by the British United Provident Association.

© Zephyr