Blackstone Makes Home Healthcare Play
BofA, Barclays and Wachovia are financing the acquisition.
June 19, 2008
The Blackstone Group has sallied forth with a bid to acquire Apria Healthcare Group for roughly $1.6 billion.
Bank of America, Wachovia and Barclays Capital have agreed to finance the purchase of the Lake Forest, Calif.-based home healthcare services company, which announced Blackstone’s $21-per-share offer on Thursday at a 33% premium over the company’s previous-day closing price. As part of the deal, Apria has also secured an additional $280 million in new financing from the transaction’s trio of lenders to repurchase its 3.3% convertible senior debt.
“Blackstone brings an experienced group of long-term healthcare investors who are committed to reinforcing our company's mission of being our patients' and customers' first choice for homecare services in the United States," said Lawrence Higby, chief executive of Apria Healthcare.
An $879.9 million market-capitalized company, Apria is a supplier of home healthcare services and products for patients across the US, including respiratory therapy and medical equipment. It manages 550 respiratory and infusion therapy locations that serve more than two million patients annually.
Apria was carrying $417.4 million of long-term debt through March 31, according to its latest quarterly regulatory filing. Its two largest shareholders are Barclays Global Investors, which holds a 14.9% stake, and Tradewinds Global Investors with 10%.
The merger agreement contains a go-shop provision, allowing the company’s board to review other purchase proposals through July 24, 2008.
The transaction is slated for closure in the second half of 2008, while shareholders are expected to meet in September 2008 to vote on the deal.
Apria will solicit shareholder approval at a special meeting that is scheduled to occur in September.
The company expects to retain its California headquarters, while its infusion division unit will remain in Denver.
Goldman Sachs is serving as financial advisor to Apria's director board, while Gibson, Dunn & Crutcher is supplying counsel. Meanwhile, Munger Tolles & Olson is acting legal counsel to the independent members of Apria's board.
Simpson Thacher & Bartlett is counsel to Blackstone.
Apria isn’t a stranger to the acquisition process, having acquired Coram for $350 million in December. The purchase gave it more than 70 infusion branch locations, 50 ambulatory infusion suites as well as centralized pharmacy distribution services that can serve patients in 50 states.
The company’s shares, trading under the ticker AHG, increased 26.7% in afternoon trading on the New York Stock Exchange to $20.05 per share.
For more information on related topics, visit the following:
