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Kindred Healthcare Signs Definitive Agreement To Acquire Home Health And Hospice Company

Kindred Healthcare, Inc. (the “Company” or “Kindred”) (NYSE:KND) today announced that it has signed a definitive agreement to acquire IntegraCare Holdings, Inc. (“IntegraCare”), a portfolio company of private equity firm Flexpoint Ford, LLC, for a purchase price of $71 million in cash plus a potential $4 million cash earn out based on 2013 earnings. The Company expects to finance the transaction with operating cash flows and proceeds from its revolving credit facility. IntegraCare will have no outstanding long-term debt at closing.

IntegraCare is a high-quality provider of home health, hospice and community services which operates 47 locations across Texas. IntegraCare currently generates annualized revenues of approximately $71 million and earnings before interest, income taxes, depreciation and amortization of approximately $9 million. The Company expects to achieve annualized synergies of approximately $1.5 million once the integration of IntegraCare is fully completed in 2013. Kindred currently operates three nursing and rehabilitation centers, nine long-term acute care (“LTAC”) hospitals, three inpatient rehabilitation facilities (“IRFs”) and one hospital-based sub-acute unit within IntegraCare’s existing service areas and the transaction will provide a platform for organic expansion into additional markets throughout the south including the Houston market where Kindred has a large market presence.

The transaction is subject to several regulatory approvals and other conditions to closing and is expected to close by the end of the third quarter of 2012. The Company expects that the transaction will be slightly accretive to earnings in 2012 and $0.07 to $0.09 per diluted share accretive to earnings in 2013.

Paul J. Diaz, Chief Executive Officer of the Company, commented that “IntegraCare is one of the highest quality home health and hospice organizations we have seen. This transaction will add further size and scale to our growing home health and hospice business. With IntegraCare, our home health and hospice division will have a revenue run rate in excess of $200 million and over 100 locations. The IntegraCare team and its existing information technology, clinical and management systems also enhance Kindred’s PeopleFirst Homecare and Hospice’s capabilities enabling additional growth.

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