Seniors Housing Weekly Update - Genesis HealthCare and Skilled Healthcare To Merge

August 19, 2014

 

August 19, 2014. 60 Seconds with Steve Monroe.  Already the largest skilled nursing company, Genesis HealthCare will be merged into Skilled Healthcare, retaining the Genesis name and George Hager as CEO, creating a skilled nursing behemoth....

HealthCare and Skilled Healthcare To Merge

In what must certainly be welcome news to the shareholders of Skilled Healthcare Group, the company will be merged into Genesis HealthCare, the largest skilled nursing operator in the country. Genesis is currently private and controlled by Formation Capital, but the merged company will retain the Genesis name and will remain publicly traded with George Hager, Genesis’ CEO, at the helm. Skilled Healthcare had been looking at strategic alternatives for several years, but it also has had a few too many operational problems over the years. It had always been known as one of the earlier firms to have a strong focus on subacute care, not to mention an above-average Medicare census, and it owns a majority of its properties, something which Genesis does not anymore. There will be about $25 million of cost synergies, and when completed early next year, Skilled’s investors will own 26% of the combined company, Formation will own 28%, management will own 9% and other Genesis shareholders will own 34%. The pro forma market cap should be between $1.1 billion and $1.3 billion, and Skilled Healthcare's shares surged by 25% in early trading. We will, of course, have a full analysis in the upcoming SeniorCare Investor. 

 

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