Shares of Genesis Healthcare ( GHCI) soared 16.4% after the company said it's being acquired by private equity investment firms Formation Capital and JER Partners.

The firms will acquire the company for $63 a share in cash. Including the assumption of approximately $450 million of debt, the deal is worth $1.7 billion.

Shares added $8.67 to $61.52 Tuesday.

"This transaction is the result of a thoughtful and comprehensive process, and we are confident that GHC will be able to accelerate achievement of its strategic goals with a partner that has financial resources, understands our business and shares our vision for the future," said CEO George Hager Jr. in a press release.

"As an independent company operating alongside Formation's portfolio of healthcare companies, GHC will continue to maintain its long-term focus on delivering superior healthcare to its residents and patients. This transaction is a change in ownership -- not a change in direction," Hager said.

As a result of the acquisition, the company will be privately held but retain the Genesis name. The deal is subject to shareholder and regulatory approvals as well as other customary closing conditions.

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