Kindred Healthcare Reiterates Commitment to All-Cash Acquisition of Gentiva for $17.25 Per Share

Kindred Has the Resources to Fund an All-Cash Transaction; Stands Ready to Execute Confidentiality, Standstill, and Definitive Merger Agreements with Gentiva

Business Wire

LOUISVILLE, Ky.--(BUSINESS WIRE)--

Kindred Healthcare, Inc. (“Kindred”) (KND) today reiterated its commitment to its proposed combination with Gentiva Health Services, Inc. (“Gentiva”) (GTIV).

As previously announced on July 21, 2014, Kindred is willing to enter into a negotiated agreement to acquire all of the outstanding shares of Gentiva for $17.25 per share in cash, subject to due diligence. Kindred is also prepared to enter into appropriate confidentiality and standstill agreements in order to facilitate discussions.

Kindred believes that the value Gentiva shareholders would receive through a combination with Kindred is superior to what Gentiva could create on a standalone basis or through a transaction with any third party. Among other things, Kindred noted the following:

  • Kindred is willing and able to quickly execute an all-cash transaction with no financing contingency at $17.25 per share. Kindred has the resources to fund an all-cash transaction. Citigroup has delivered a “highly confident letter” indicating that it is highly confident in its ability to arrange financing for such a transaction subject to the terms and conditions set forth therein. At the time of signing a definitive acquisition agreement, Kindred intends to have bank commitment letters in place, and any such agreement will not contain a financing condition. In addition, Kindred’s recently completed $221 million equity offering is a further indication of Kindred’s ability to move forward quickly with an all-cash transaction.
  • In addition to offering Gentiva shareholders an all-cash consideration, Kindred is willing to work with Gentiva to structure a transaction under which Gentiva shareholders could elect to receive a mix of cash and stock, enabling them to participate in the significant upside potential of the combined company. Kindred expects to achieve at least $60 million to $80 million in operating and financial synergies in the first two years of a combination, with $40 million expected in the first year alone. While Kindred is fully prepared to pay all cash, many Gentiva shareholders have indicated their preference for a transaction structure that would provide them with the option to receive equity in the combined company. Given Kindred’s standalone prospects, as well as the benefits of the proposed combination, Kindred believes that a cash and stock transaction would deliver greater value to Gentiva shareholders than cash alone.
  • A transaction with Kindred would deliver more value to Gentiva shareholders than any other alternative. Given that Kindred and Gentiva have complementary assets and geographic footprints, Kindred believes it could realize more synergies than any other strategic bidder. In addition, Kindred believes that the sale of Gentiva for $17.25 per share will deliver far greater value to Gentiva shareholders than the continued execution of Gentiva’s standalone plan. Accordingly, Kindred expects that, with due diligence, it will be best positioned to provide the greatest value to Gentiva shareholders.
  • Kindred has already received antitrust approval for its proposed combination with Gentiva. On July 22, 2014, the Federal Trade Commission granted termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Furthermore, Kindred believes that the proposed combination poses minimal execution risk given the Kindred management team’s extensive experience and success in integrating acquisitions.

Paul J. Diaz, Chief Executive Officer of Kindred, commented, “We are as committed as ever to reaching agreement on a value-creating combination of Kindred and Gentiva, and we stand ready to quickly execute an all-cash transaction with no financing condition.”

Mr. Diaz added, “We are eager to work with Gentiva, and look forward to entering into appropriate confidentiality and standstill agreements so that we can start the due diligence process. We are confident that constructive dialogue between our two companies will allow us to deliver the value inherent in the proposed combination to our respective shareholder groups, as well as our patients and employees.”

Citigroup is acting as financial advisor to Kindred. Cleary Gottlieb Steen & Hamilton LLP is acting as legal advisor and Gibson, Dunn & Crutcher LLP is serving as special counsel to Kindred.

Forward-Looking Statements

This press release includes forward-looking statements, including, but not limited to, statements regarding Kindred’s proposed business combination transaction with Gentiva (including financing of the proposed transaction and the benefits, results, effects and timing of a transaction), all statements regarding Kindred’s (and Kindred and Gentiva’s combined) expected future financial position, results of operations, cash flows, dividends, financing plans, business strategy, budgets, capital expenditures, competitive positions, growth opportunities, plans and objectives of management, and statements containing the words such as “anticipate,” “approximate,” “believe,” “plan,” “estimate,” “expect,” “project,” “could,” “would,” “should,” “will,” “intend,” “may,” “potential,” “upside,” and other similar expressions. Statements in this press release concerning the business outlook or future economic performance, anticipated profitability, revenues, expenses, dividends or other financial items, and product or services line growth of Kindred (and the combined businesses of Kindred and Gentiva), together with other statements that are not historical facts, are forward-looking statements that are estimates reflecting the best judgment of Kindred based upon currently available information.

Such forward-looking statements are inherently uncertain, and stockholders and other potential investors must recognize that actual results may differ materially from Kindred’s expectations as a result of a variety of factors, including, without limitation, those discussed below, set forth in Kindred’s Annual Report on Form 10-K and in its reports on Forms 10-Q and 8-K. Such forward-looking statements are based upon management’s current expectations and include known and unknown risks, uncertainties and other factors, many of which Kindred is unable to predict or control, that may cause Kindred’s actual results, performance or plans with respect to Gentiva, to differ materially from any future results, performance or plans expressed or implied by such forward-looking statements. These statements involve risks, uncertainties and other factors discussed below and detailed from time to time in Kindred’s filings with the Securities and Exchange Commission (the “SEC”).

Risks and uncertainties related to the proposed transaction with Gentiva include, but are not limited to, uncertainty as to whether Kindred will further pursue, enter into or consummate any transaction on the proposed terms or on other terms, potential adverse reactions or changes to business relationships resulting from the announcement or completion of any transaction, uncertainties as to the timing of any transaction, adverse effects on Kindred’s stock price resulting from the announcement or consummation of any transaction or any failure to complete any transaction, competitive responses to the announcement or consummation of any transaction, the risk that regulatory, licensure or other approvals and financing required for the consummation of any transaction are not obtained or are obtained subject to terms and conditions that are not anticipated, costs and difficulties related to the integration of Gentiva’s businesses and operations with Kindred’s businesses and operations, the inability to obtain, or delays in obtaining, cost savings and synergies from any transaction, uncertainties as to whether the consummation of any transaction will have the accretive effect on our earnings or cash flows that we expect, unexpected costs, liabilities, charges or expenses resulting from any transaction, litigation relating to any transaction, the inability to retain key personnel, and any changes in general economic and/or industry-specific conditions.

Many of these factors are beyond Kindred’s control. Kindred cautions investors that any forward-looking statements made by Kindred are not guarantees of future performance. Kindred disclaims any obligation to update any such factors or to announce publicly the results of any revisions to any of the forward-looking statements to reflect future events or developments.

Additional Information

This press release is provided for informational purposes only and does not constitute an offer to purchase or the solicitation of an offer to sell any securities of Gentiva. Kindred may file a registration statement and/or tender offer documents with the SEC in connection with a possible business combination transaction with Gentiva. Kindred and Gentiva shareholders should read those filings, and any other filings made by Kindred with the SEC in connection with a possible business combination, if any, as they will contain important information. Those documents, if and when filed, as well as Kindred other public filings with the SEC, may be obtained without charge at the SEC’s website at www.sec.gov and at Kindred’s website at www.kindredhealthcare.com.

About Kindred Healthcare

Kindred Healthcare, Inc., a top-150 private employer in the United States, is a FORTUNE 500 healthcare services company based in Louisville, Kentucky with annual revenues of $5 billion and approximately 63,000 employees in 47 states. At June 30, 2014, Kindred through its subsidiaries provided healthcare services in 2,353 locations, including 97 transitional care hospitals, five inpatient rehabilitation hospitals, 98 nursing centers, 21 sub-acute units, 153 Kindred at Home hospice, home health and non-medical home care locations, 104 inpatient rehabilitation units (hospital-based) and a contract rehabilitation services business, RehabCare, which served 1,875 non-affiliated facilities. Ranked as one of Fortune magazine’s Most Admired Healthcare Companies for six years in a row, Kindred’s mission is to promote healing, provide hope, preserve dignity and produce value for each patient, resident, family member, customer, employee and shareholder we serve. For more information, go to www.kindredhealthcare.com.

Contact:
Media
Kindred Healthcare, Inc.
Susan Moss, 502-596-7296
Senior Vice President, Marketing and Communications
or
Joele Frank, Wilkinson Brimmer Katcher
Andy Brimmer / Andrew Siegel, 212-355-4449
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Investors and Analysts
Kindred Healthcare, Inc.
Stephen Farber, 502-596-2525
Executive Vice President, Chief Financial Officer
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D.F. King & Co., Inc.
Jordan Kovler / Kristian Klein
212-493-6990 / 212-232-2247

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