Why Kindred Healthcare is Buying Gentiva for $1.8 Billion
Kindred Healthcare Inc. (NYSE: KND) and Gentiva Health Services Inc. (NASDAQ: GTIV) have reached a definitive agreement under which Kindred will acquire all outstanding shares of Gentiva common stock for $19.50 per share.
The cash and stock deal was valued at $1.8 billion, including the assumption of net debt. The companies expect the closing of the transaction to occur in the first quarter of next year.
Under terms of the agreement, Gentiva shareholders will receive $14.50 per share in cash and $5 of Kindred common stock.
According to Kindred, the merger accelerates the development of an integrated approach to patient care, creating significant value for both companies’ patients, employees and shareholders.
“With Gentiva, we will expand the breadth of our offerings and our geographic footprint and enhance our presence in Kindred’s Integrated Care Markets to drive more efficient and cost-effective coordinated care across more communities,” said Benjamin A. Breier, President and Chief Operating Officer of Kindred Healthcare. “This combination strengthens our ability to serve patients across the full continuum of care – from the hospital to the home. Together we will create the industry leading provider of home based patient-centered care, solidifying our position at the forefront of the care delivery model that is preferred by patients and payers. As a combined company, we will continue to grow and help shape the American healthcare delivery system.”
In an issued news release, Kindred outlined both strategic and financial benefits of the combination. Improvements in care, stronger workforces and an increase in revenues were noted.
On a pro forma basis, the combined company is expected to generate annual revenues of approximately $7.1 billion and an operating income of $1 billion. Kindred also believes the acquisition of Gentiva will “immediately and significantly” accretive to earnings and operating cash flows.
“This merger represents a successful conclusion to a process in which, from the beginning, we have focused on maximizing value for Gentiva’s shareholders consistent with our board’s responsibilities while ensuring the future success of the company, said Rodney D. Windley, Executive Chairman of the Board of Gentiva. “The cash and equity structure of the transaction, which represents a 128 percent premium to Gentiva shares since Kindred’s offer became public, provides Gentiva shareholders with immediate value and the opportunity to participate in the potential growth and value creation of the combined company by virtue of their continued investment in Kindred stock. On behalf of our board and management team, I would like to express my deep appreciation to our employees across the country for their dedication and commitment to our patients and the families that we serve each and every day.”
Aligning with Kindred’s five-year strategic plan, the merger will create “the largest provider of integrated care in America,” according to Tony Strange, Chief Executive Officer of Gentiva.
Bachem turns 50 - a timeline
Bachem, a supplier to pharmaceutical and biotechnology companies worldwide, is celebrating its 50th anniversary this month. We take a look at the Swiss company's history.
1971 - beginnings
Bachem is founded by entrepreneur Peter Grogg in Liestal, a small town near Basel in Switzerland. Grogg started the firm with just two employees, and with a focus on peptide synthesis - peptides are composed of amino acids that have a variety of functions treating health conditions such as cancer and diabetes.
1977 - 1981 - early growth
Bachem moves its headquarters to the Swiss town of Bubendorf, with eight employees. In 1978 the company produces peptides for use in medicines for the first time. In 1981 production capacity triples and the workforce grows to 150.
1987 - 1996 - worldwide expansion
The company expands into the US with Bachem Bioscience, Inc. in Philadelphia. To strengthen its presence in Europe, Bachem opens sales and marketing centres in Germany in 1988.
Further sales centres open in France in 1993. By 1995 the company employs 190 people. In 1996 it acquires the second largest manufacturer of peptides in the world and forms Bachem California with a site in Torrance.
1998 - 2003 - Bachem goes public
Bachem company goes public and lists shares on the Swiss Stock Exchange. Further acquisitions include Peninsula Laboratories, Inc, based in California, and Sochinaz SA, a Swiss-based manufacturer of active pharmaceutical ingredients. By 2001, the company has 500 employees and sales reach 141 million CHF.
In 2003 the organisation is given a new legal holding structure to support its continued growth, which remains in place to this day.
2007 - 2013 - acquisitions
Bachem acquires a brand by Merck Biosciences for ready-to-use clinical trial materials and related services.
In 2013, together with GlyTech, Inc. Bachem announces the development of a new amino acid that can help to treat multiple sclerosis, with a world market of more than $4 billion.
In 2015 it acquires the American Peptide Company (APC), which becomes integrated into Bachem Americas.
2016 - 2019 - a global leader
In 2016 the group opens a new building dedicated to R&D projects and small series production in Bubendorf. With a total of 1,022 employees, the workforce exceeds the 1,000 mark for the first time in the company’s history. Sales are over the 200 million mark for the first time at 236.5 million CHF.
Bachem expands into Asia with the establishment of a new company in Tokyo called Bachem Japan K.K.
By 2019 Bachem has a growing oligonucleotide portfolio - these are DNA molecules used in genetic testing, research, and forensics. It is hoped this will become a significant product range in the future.
2020 - COVID-19
Despite the COVID-19 pandemic, Bachem secures its supply of active ingredients, and even increases it in critical areas. Sales exceed the 400 million Swiss franc mark for the first time, and 272 new employees are hired.
2021 - a milestone anniversary
Bachem celebrates its 50th anniversary and position as a global leader in the manufacture of peptides. While it remains headquartered in Bubendorf, the company employs 1,500 people at six locations worldwide. In the next five years there are plans to continue expanding.
Commemorating the company's anniversary, Kuno Sommer, Chairman of the Board of Directors, said: "Bachem's exceptional success story from a small laboratory to a global market leader is closely linked to Peter Grogg's values, and has been shaped by innovation, consistent quality and cost awareness, as well as by entrepreneurial vision."