Almost Family Announces $350 Million Credit Facility; Receipt of Regulatory Approvals for Acquisition
December 06 2016 - 7:30AM
Almost Family, Inc. (Nasdaq:AFAM), a leading regional provider of
home health nursing services, announced today it has entered into a
new five-year $350 million revolving credit facility that increases
its financial flexibility through 2021 (the Facility). J.P.
Morgan Securities LLC acted as lead book-runner and arranger, while
Bank of America, N.A. acted as joint lead arranger under the
Facility which replaces the Company's previous $175 million credit
facility. The Facility includes an accordion feature which
permits expansion up to $500 million.
The Company also announced that it cleared the
necessary regulatory approvals for the previously announced
agreement to acquire a controlling interest in the entity holding
the home health and hospice assets of Community Health Systems,
Inc. (NYSE:CYH) (CHS). CHS Home Health, a provider of skilled
home health and hospice services, currently operates 74 home health
and 15 hospice branch locations in 22 states. With the
completion of this transaction, Almost Family will operate 340
branches across 26 states and its annual net revenue run rate is
expected to exceed the $800 million mark. The Company expects
to fund the acquisition on December 30, 2016 the last day of its
fiscal year.
William Yarmuth, Chief Executive Officer,
commented, “We are extremely pleased to announce this larger
facility, along with having received the necessary regulatory
approvals we need to close on the previously announced CHS
joint-venture. Both of these accomplishments will allow us to
close on the transaction by the end of the year. We look
forward to getting this deal closed and getting started on our
exciting new partnership.”
Steve Guenthner, President, added, “We are very
pleased with the results of our syndication effort, providing us
with a lower cost facility that now has the capacity to be as large
as a half-billion dollars. In addition to the leadership of
JPMorgan in a successful syndication, we acknowledge the strong and
consistent support of our existing bank group and welcome Capital
One to our valuable consortium of credit providers.”
Other MattersThe Company also
reminded investors of the following:
- The Company’s results of operations for the third quarter of
2016 included revenue from an annual payment of $4.3 million to its
Imperium ACO-enablement subsidiary (reported in the Healthcare
Innovations segment). Under the Medicare Shared Savings ACO
program, success-based revenues are recorded only once per year
each third quarter, thus no additional success-based revenues, if
any, will be recorded before the third quarter of 2017.
- As previously disclosed, final FY2017 Medicare reimbursement
regulations are expected to reduce our reimbursement rates for
FY2017 between 1% and 2%. Since reimbursement is determined
based on the ending date of each episode, these new rates will be
in effect for a portion of the episodic revenue reported during the
fourth quarter of 2016.
- The Company’s results for the fourth quarter of 2015 included
new results of operations from businesses acquired in mid-third
quarter 2015 (Ingenios and WillCare) and mid-fourth quarter 2015
(Blackstone). The Company has completed no acquisitions in
the third quarter of 2016 and, other than the timing of the CHS
joint venture as described elsewhere in this release, the Company
does not expect to complete any acquisitions in the fourth quarter
of 2016.
- Approximately 25% of the Company’s revenues are generated in
the state of Florida where Hurricane Matthew created some temporary
disruption in early October.
- The Company expects to close the CHS joint venture transaction
on December 30, 2016, with transfer of control of the operations to
the Company at 12:01 AM December 31, 2016, which is the first day
of the Company’s 2017 fiscal year.
The Company also noted that it will continue to
aggressively pursue quality acquisitions of in-home healthcare
service providers consistent with its stated strategy and the types
of services its segments currently provide.
New Credit Facility
DetailsThe $350 million facility includes a
syndicate of five banks including JPMorgan Chase Bank, as
Administrative Agent, Bank of America, Fifth Third Bank and Regions
Bank, all existing syndicate banks that expanded their commitments
and the addition of Capital One Bank. The Facility extends
the maturity profile of our bank commitment to December 2021.
The Facility may be used for general corporate purposes including
acquisitions and also contains an accordion feature to increase
total commitments to $500 million. Borrowings, other than
letters of credit, under the Facility generally will bear interest
at a rate varying from LIBOR rate plus 1.50% to LIBOR rate plus
2.75%, depending on leverage (0.25% lower than the previous
facility). The Facility is secured by substantially all of
the Company’s assets and the stock of its subsidiaries.
About Almost Family, Inc.Almost
Family, Inc., founded in 1976, is a leading regional provider of
home health nursing services, with branch locations in Florida,
Ohio, Tennessee, New York, Connecticut, Kentucky, New Jersey,
Massachusetts, Pennsylvania, Georgia, Wisconsin, Indiana, Missouri,
Illinois, Mississippi and Alabama (in order of revenue
significance). Almost Family, Inc. and its subsidiaries
operate a Medicare-certified segment and a personal care
segment. Excluding the CHS joint venture, Almost Family
operates 250 branch locations in sixteen U.S. states.
Forward Looking StatementsAll
statements, other than statements of historical facts, included in
this news release are forward looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements may be identified by the use of
forward-looking terminology such as “may,” “will,” “expect,”
“believe,” “estimate,” “project,” “anticipate,” “continue,” or
similar terms, variations of those terms or the negative of those
terms. These forward-looking statements are based on the
Company’s current plans, expectations and projections about future
events. Statements about the Company’s or CHS Home Health’s
past financial results do not, and are not meant to, predict future
results. The Company can provide no assurance that such
results and performance will continue.
Because forward-looking statements involve risks
and uncertainties, the Company’s actual results could differ
materially from any future results, performance or achievements
expressed or implied by such forward-looking statements. The
potential risks and uncertainties which could cause actual results
to differ materially include: the satisfaction of the conditions
precedent to the consummation of the proposed transaction,
including, without limitation, the receipt of regulatory approvals
or third party consents on the terms desired or anticipated; the
Company’s ability to obtain financing on the anticipated terms and
schedule; disruptions of the Company’s and CHS Home Health’s
current plans, operations and relationships caused by the
announcement and pendency of the proposed transaction; the impact
of further changes in healthcare reimbursement systems, including
the ultimate outcome of potential changes to Medicare reimbursement
for home health services and to Medicaid reimbursement due to state
budget shortfalls; the ability of the Company to maintain its level
of operating performance and achieve its cost control objectives;
changes in our relationships with referral sources; unanticipated
difficulties or expenditures relating to the proposed transaction,
including, without limitation, difficulties that result in the
failure to achieve expected synergies, efficiencies and cost
savings from the proposed transaction within the expected time
period (if at all); government regulation; health care reform;
pricing pressures from Medicare, Medicaid and other third-party
payers; changes in laws and interpretations of laws relating to the
healthcare industry; the ability of the Company to integrate,
manage and keep secure our information systems; changes in the
marketplace and regulatory environment for Health Risk Assessments
and the Company’s self-insurance risks. For a more complete
discussion regarding these and other factors which could affect the
Company’s financial performance, refer to the Company’s various
filings with the Securities and Exchange Commission, including its
filing on Form 10-K for the fiscal year ended January 1,
2016, in particular information under the headings “Special Caution
Regarding Forward-Looking Statements” and “Risk Factors.”
With regard to the Company’s investment in development-stage
enterprises in its Healthcare Innovations segment, there can be no
assurance that its operational and developmental objectives will be
realized or that the Company’s investments will result in future
returns. The Company undertakes no obligation to update or
revise its forward-looking statements.
Almost Family, Inc.
Steve Guenthner
(502) 891-1000
Community Health Systems (NYSE:CYH)
Historical Stock Chart
From Mar 2024 to Apr 2024
Community Health Systems (NYSE:CYH)
Historical Stock Chart
From Apr 2023 to Apr 2024