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 Genesis to Buy Skilled Healthcare in $5.5 Billion Stock Swap

Genesis HealthCare, the nation’s largest long term and post-acute provider, has agreed on an all-stock deal that will bring Skilled Healthcare into Genesis’ growing empire.
The stock swap, announced Monday, will give Skilled Healthcare shareholders a little more than 25 percent of the new company; Genesis shareholders will retain the rest and will lend the newly merged company its name. Genesis Chief Executive Officer George Hager Jr. will retain his title atop the firm.

Earlier this year, Genesis topped Provider’s list of the 50 largest nursing facility companies, and Skilled Healthcare came in at 14. If Monday’s deal is approved by regulators, the combined company will have about 95,000 employees in more than 500 assisted living centers and skilled nursing homes across 34 states. The two companies made nearly $5.5 billion in revenue last year, Bloomberg reports.
According to Provider’s “Top 50” data, Genesis already offers 49,000 beds in 30 states and had a total operating revenue of $4.68 billion. Absorbing Skilled Healthcare, though, rounds out Genesis’ service offerings, giving the giant a pharmacy component it had lacked.
In a published statement, Hager said Genesis was looking for extra security in a “constantly changing health care environment.” The deal, if approved, will bring Genesis back into the public domain. The company was taken private in 2007 in a $1.9 billion deal with Formation Capital.
Whatever other feelings the proposed merger generates, it’s already won endorsement from Genesis’ landlord, Sabra Health Care REIT. Genesis is Sabra’s biggest client, and Sabra Chairman and CEO Rick Matros says he’s sure “the quality of our tenant base … is only strengthened by this transaction and our shareholders will benefit by the enhanced transparency of Genesis being a publicly traded company.”
The companies are hoping to close the deal early next year.
Bill Myers is Provider’s senior editor. Email him at Follow him on Twitter, @ProviderMyers.
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