By Lisa Kerner
Charlotte, N.C., Jan. 15 - Odyssey HealthCare, Inc. agreed to acquire VistaCare, Inc. for $8.60 per share, or approximately $147.1 million.
The transaction is expected to close in the first quarter.
A termination fee of $4.4 million is included in the agreement, according to a form 8-K filing with the Securities and Exchange Commission.
The transaction is structured as a two-step acquisition: a cash tender offer for outstanding shares of VistaCare common stock will be followed by a cash merger in which Odyssey would acquire any remaining outstanding VistaCare shares.
"This transaction is a turning point for Odyssey as we expect to exceed $617 million in net revenues, improve our platform for growth in our core hospice business and add valuable and talented professionals to our company," Odyssey president and chief executive officer Robert A. Lefton said in a company news release.
"Our combination with VistaCare will substantially extend our industry leadership and our geographical reach in the markets we serve and create additional visibility that adds value in recruiting and development activities," Lefton added.
Expected synergies include a reduction in corporate overhead and the closure of VistaCare's corporate office.
Odyssey plans to fund the transaction with $30 million of its own cash and a funded commitment of $150 million from GE Capital, consisting of a five-year $30 million revolving credit facility and a six-year $120 million term loan, the release stated.
Both VistaCare and Odyssey are hospice care providers. VistaCare is located in Scottsdale, Ariz., and Odyssey is based in Dallas.
Acquirer: | Odyssey HealthCare, Inc.
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Target: | VistaCare, Inc.
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Announcement date: | Jan. 15
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Transaction total: | $147.1 million
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Price per share: | $8.60
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Termination fee: | $4,413,500
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Expected closing: | First quarter of 2008
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Stock price of target: | Nasdaq: VSTA: $7.16 on Jan. 14
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