Gentiva Health to Acquire Odyssey HealthCare

Chandrasekhar Atreya
24 May, 2010
New York City

Gentiva Healthcare Services agrees to acquire Odyssey Healthcare in an all cash transaction of $1 billion to provide a leading hospice and healthcare company.

[R]Gentiva Healthcare Services agrees to acquire Odyssey Healthcare in an all cash transaction of $1 billion to provide a leading hospice and healthcare company.[/R]

Gentiva Health Services Inc. said it has entered into a merger agreement whereby Gentiva will acquire Odyssey HealthCare Inc. in an all cash transaction for a price of $27 per share of Odyssey common stock, for an aggregate purchase price of around $1.0 billion.

The transaction was unanimously approved by the Board of Directors of Gentiva. Odyssey''s Board of Directors has also unanimously approved the agreement and recommended that Odyssey''s shareholders approve the merger.

The transaction is expected to close in the third quarter of 2010 subject to standard closing conditions, including regulatory approvals and clearance under the Hart-Scott-Rodino Act as well as approval by Odyssey''s stockholders.

Gentiva, which is a leading home healthcare provider in the US, anticipates that the combination of Odyssey''s and Gentiva''s existing hospice operations will create a leading hospice care provider in the US, with a combined average daily patient census of approximately 14,000 and operations in 30 states.

Following the completion of the deal, Gentiva expects the acquisition of Odyssey HealthCare to be accretive to adjusted earnings per share, exclusive of one-time costs, within the first 12 months.

Gentiva expects to raise about $1.1 billion in new debt financing to fund the purchase and to refinance existing debt from a syndicate of leading financial institutions, including BofA Merrill Lynch, Barclays Bank PLC, General Electric Capital Corporation, and SunTrust Bank and SunTrust Robinson Humphrey, Inc.

Edge Healthcare Partners, LLC, a division of Edge Corporate Finance, LLC is acting as financial advisor to Gentiva. Greenberg Traurig, LLP is acting as legal advisor to Gentiva. BofA Merrill Lynch and Barclays Capital Inc. served as advisors to Gentiva and both firms are serving in lead advisor roles with respect to the financing of the transaction.

Goldman, Sachs & Co. is acting as financial advisor to the Board of Directors of Odyssey. K&L Gates LLP is acting as legal advisor to Odyssey.

Gentiva gained 12.25% to $28.95 per share and Odyssey gained 37.12% to $26.44 real time on the Nasdaq.