Genesis HealthCare To Combine With Skilled Healthcare In 100% Stock Transaction

KENNETT SQUARE, Pa., Aug. 18, 2014 /PRNewswire/ -- Genesis HealthCare, one of the nation's largest providers of post-acute care services, today announced that it has signed a definitive agreement to combine with Skilled Healthcare Group, Inc., based in Foothill Ranch, California. The combined company will be able to expand its core business lines and enhance its collective ability to provide the highest quality patient care while meeting the current challenges facing the healthcare industry. The combined company will provide scale and resources to continue investment for the future.

Under the terms of the agreement, Skilled Healthcare shareholders will collectively own 25.75% of the vote and value of the fully-diluted equity of the combined company.  Genesis HealthCare shareholders will own the other 74.25%.  The closing of the transaction is subject to regulatory approvals, expiration of the waiting period under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976, as well as other conditions. The closing is expected to occur in early 2015.

After completion of the transaction, the combined company will operate under the Genesis HealthCare name and will be traded on the NYSE.  Headquarters for the combined company will remain in Kennett Square, PA, and George V. Hager, Jr. will be the CEO of the newly-combined company. The Board of Directors will initially consist of representative Directors from both companies as well as independent Directors.  This will create a governance structure that will facilitate and help to build strategic value.

The combined company would have trailing 12 months revenues (as of June 30, 2014) of more than $5.5 billion, with more than 500 facilities in 34 states and approximately 95,000 employees.  Conservatively, $25 million in synergies have been identified in the transaction, with additional upside potential. The Combined Company estimated Pro-forma Funded Net-Debt is expected to be approximately $925 million. 

For the six months ending June 30, 2014, Genesis HealthCare had Non-GAAP revenues of approximately $2.4 billion, Non-GAAP EBITDA of $86 million, Non-GAAP EBITDAR of $310 million, and cash based rent of $224 million.

"The constantly changing healthcare environment presents challenges for today's post-acute healthcare industry providers," states Genesis Chief Executive Officer George V. Hager, Jr.  "The combination of our portfolios enables Genesis to enter the public domain, expand opportunities and enter new markets with our sub-acute and long-term care facilities and our rehabilitation services business."

"The combination of Genesis and Skilled Healthcare will improve overall financial positions and liquidity while creating opportunities of scale as one of the largest providers in the sector," note Steve Fishman and Arnold Whitman, co-chairmen of the board of Genesis HealthCare.  "The combined company will be well positioned to innovatively partner with payors and providers to meet the ever-changing needs of seniors across the nation." 

BofA Merrill Lynch and Barclays are acting as Genesis' financial advisors, and Skadden, Arps, Slate, Meagher & Flom LLP and Arnall Golden Gregory LLP are acting as legal advisors.

Conference Call
A combined conference call and webcast will be held tomorrow, August 19, at 6:00 a.m. Pacific Time (9:00 a.m. Eastern Time) to discuss the transaction.

To participate in the call, interested parties may dial (800) 847-9525 and reference conference 90584822. Alternatively, interested parties may access the call in listen-only mode at www.skilledhealthcaregroup.com. A replay of the conference call will be available after 12:00 noon Pacific Time at www.skilledhealthcaregroup.com.

About Genesis HealthCare
Genesis HealthCare is one of the nation's largest post-acute care providers with more than 400 skilled nursing centers and senior living communities in 28 states nationwide. Genesis also supplies rehabilitation therapy to nearly 1,400 healthcare providers in 45 states. Visit our website at www.genesishcc.com.

Forward-Looking Statements
Statements made in this release that are not historical facts are "forward-looking" statements that involve risks and uncertainties and are subject to change at any time. These forward-looking statements may include, but are not limited to, statements containing words such as "anticipate," "believe," "plan," "estimate," "expect," "hope," "intend," "may" and similar expressions. Forward-looking statements in this release include all statements regarding the expected benefits and timing of the proposed transaction. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially, including, but not limited to, delays in or failure to satisfy required closing conditions, including the receipt of required regulatory approvals with respect to the transaction; failure to consummate or delay in consummating the transaction for other reasons; the possibility that the expected benefits may not materialize as expected; and failure to successfully integrate the infrastructure and employees of the two companies. There may be additional risks of which Genesis is presently unaware or that it currently deems immaterial.

The forward-looking statements involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond Genesis' control. Genesis cautions investors that any forward-looking statements made by Genesis are not guarantees of future performance and are only made as of the date of this release. Genesis 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. 

PRESS CONTACT: Jeanne Moore
[email protected]
484-949-5647

INVESTOR CONTACT: Lori Mayer
[email protected]
610-925-2000

SOURCE Genesis HealthCare

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