Seniors Housing Weekly Update-- Kindred Healthcare Expands Post-Acute Services In Texas
August 21, 2012
Kindred Healthcare Expands Post-Acute Services In Texas
The home health care and hospice acquisition market has been a little quiet for several years, with reimbursement uncertainty playing an obvious role. Stand-alone home health businesses are most at risk, but those that are part of an integrated delivery system should do better. A case in point is Kindred Healthcare’s recently announced acquisition of a Texas home health and hospice company, known as IntegraCare with 47 locations across the state, for $71 million. This is actually one of the largest home health acquisitions in the past 12 to 18 months. Kindred’s focus has been on developing cluster markets for post-acute services, and it has three SNFs, nine LTACs and three inpatient rehab facilities in IntegraCare’s markets. That should represent a lot of complementary services in those markets, and help Kindred with its managed care contracts and penetration of the ACO market. The price was not cheap, at 1.0x revenues and 7.9x EBITDA before earn-outs. But it should be a good fit and it will be accretive to earnings next year.