ATLANTA — Gentiva Health Services announced it has entered a definitive agreement to acquire Dallas-based hospice provider Odyssey HealthCare for approximately $1 billion in an all-cash transaction.
The merger will create a hospice care provider with an average daily patient census of 14,000 and operations in 30 states, and the largest health care provider in the United States focused on home health and hospice services. The combination will also create a company with more than $1.8 billion in annual revenue, with 60 percent of that from home health and 40 percent from hospice revenue.
Unanimously approved by both the board of directors at both companies, the deal is expected to close in the third quarter and is subject to standard closing conditions, including regulatory approvals and clearance under the Hart-Scott-Rodin Act as well as approval by Odyssey's stockholders. Gentiva said it expects to raise $1.1 billion in new debt financing to fund the purchase price and refinance existing debt.
Following the February sale of its respiratory, HME and infusion business to Lincare — which included about 40 locations in seven states — Gentiva said that moving forward, the company would focus primarily on hospice and home health services to seniors.
In March, the company acquired Mississippi-based Heart to Heart Hospice, and announced last week it has completed acquisition of the assets of United Home Care Group, a Medicare-certified home health services business with six offices in the state of Louisiana. Gentiva can now provide home health services to approximately 85 percent of the state, the company said.
"We are delighted to welcome the Odyssey employees to the Gentiva family," Gentiva CEO and President Tony Strange said in a release. "The combination of the two companies clearly positions us as a leader in both home health and hospice care in the United States. The two companies share similar geography between Gentiva's home health operations and Odyssey's hospice operations, with very little overlap between the two companies' hospice programs. "
Gentiva currently provides skilled nursing, physical, occupational, speech and neurorehabilitation services, hospice, social work, nutrition, disease management education and help with daily living activities. The company reported net revenue of $297.1 million for the first quarter.
