Kindred Healthcare plans $2.98 billion credit facilities for buyout

By Sara Rosenberg

New York, Feb. 5 – Kindred Healthcare Inc. plans on getting $2,975,000,000 of senior secured credit facilities to help fund its acquisition by TPG Capital, Welsh, Carson, Anderson & Stowe (WCAS) and Humana Inc., according to a PREM14A filed with the Securities and Exchange Commission on Monday.

JPMorgan Chase Bank, Morgan Stanley Senior Funding Inc., Citigroup Global Markets Inc., Goldman Sachs Bank USA, Bank of America Merrill Lynch, Capital One, RBC Capital Markets and Wells Fargo Securities LLC provided the commitment.

The debt commitment consists of a $280 million revolver, a $1.36 billion first-lien term loan and a $475 million second-lien term loan to Kentucky Homecare Holdings Inc., and a $450 million asset-based loan facility and a $410 million term loan to Kentucky Hospital Holdings LLC.

Other funds for the transaction will come from $1.94 billion in equity.

In addition to funding the buyout, the debt and equity will be used to refinance Kindred’s existing credit facilities and senior notes and for working capital and general corporate purposes.

Under the agreement, Kindred stockholders will receive $9 in cash for each share of common stock they hold. The purchase price is about $4.1 billion in cash including the assumption or repayment of net debt.

Immediately following the acquisition of Kindred, the home health, hospice and community care businesses will be separated from Kindred and operated as a stand-alone company owned 40% by Humana, with the remaining 60% owned by TPG and WCAS.

Kindred’s long term acute care hospitals, inpatient rehabilitation hospitals and contract rehabilitation services businesses will be operated as a separate specialty hospital company owned by TPG and WCAS (Kindred Healthcare).

Closing is expected during the summer of 2018, subject to the approval by the stockholders of Kindred, the receipt of certain licensure and regulatory approvals, the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976 and other customary conditions.

Kindred Healthcare is a Louisville, Ky.-based health care services company.

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