Genesis HealthCare and Skilled Healthcare Group Inc. are merging in an all-stock transaction.

Genesis HealthCare, headquartered in Kennett Square, Pennsylvania, provides post-acute care through more than 400 skilled nursing centers and senior living communities in 28 states. The company also provides rehabilitation therapy to health care providers.

Foothill Ranch, California-based Skilled Healthcare operates skilled nursing facilities, assisted living facilities, rehabilitation therapy business, hospice businesses and a home health care business.

The combined company expects to have 12-month revenues of more than $5.5 billion. The deal gives Genesis HealthCare shareholders 74.25 percent of the combined company, and Skilled Healthcare shareholders the other 25.75 percent.

"The constantly changing healthcare environment presents challenges for today's post-acute healthcare industry providers," states Genesis CEO George 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."

Bank of America Merrill Lynch and Barclays are acting as Genesis' financial advisers, and Skadden Arps Slate Meagher & Flom LLP and Arnall Golden Gregory LLP are providing legal advice.

The Affordable Care Act is behind a lot of activity in the health care M&A space as providers look to combine and expand offerings as more patients come into the system. For more, see "5 Technologies Fuel Health Care M&A" and "ACA Reshuffles the Deck."


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