ProMedica Selling Hospice, Home Care Business to Gentiva in $710M Deal

By Zahida Siddiqi

ProMedica is selling its Heartland hospice and home care service line to hospice giant Gentiva for $710 million.

The deal, announced Monday, comes on the heels of nonprofit health system ProMedica divesting of nearly 150 skilled nursing facilities in a deal involving Welltower (NYSE: WELL) and Integra Health. ProMedica still operates about 60 Arden Courts memory care communities in a joint venture with Welltower.

Gentiva is the largest hospice company in the U.S. based on revenue and number of patients, some of whom reside in assisted living communities and skilled nursing facilities. The deal with ProMedica values Heartland at $710 million, including debt, Bloomberg reported, citing unnamed sources who are familiar with the transaction.

The deal will result in Gentiva increasing its locations to 500 from 380, the company’s CEO David Causby noted to Bloomberg.

Meanwhile, the number of patients overseen by Gentiva will jump to 34,000 from 25,000 patients, and its employee-base will increase by around 4,000 from more than 30,000, Causby said.

Although Gentiva couldn’t share a precise breakdown for the number of assisted living residents it caters to, a spokesperson told Senior Housing News’ sister publication Skilled Nursing News, “we care for patients wherever they call home, including both SNFs and ALFs.”

Most of the care provided by ProMedica’s home health and hospice agencies is delivered in people’s homes, a representative of the health system.

“This transaction is an exciting development for patients and their families that will enable us to extend our best-in-class caregiver recruitment and retention programs and provide high-quality care to more patients in more areas throughout the country,” Causby said in a press release. “Heartland is a high-quality hospice and home care provider that shares our values on compliance and putting patients first, and my colleagues and I look forward to growing our number of caregivers so we can expand access to the highest-quality care for more seniors.”

Gentiva, which formerly operated as part of Kindred at Home, was renamed last year when Clayton Dubilier & Rice bought a 60% stake in Kindred at Home’s hospice and personal-care divisions from Humana (NYSE: HUM), which currently has a 40% stake in the business.

Among the improvements Gentiva hopes to bring with the deal is in staffing. Gentiva has one nurse per 9 patients, while the industry average is one nurse per 13 to 15 patients, the press release stated.

“Our ability to attract and hire and retain our clinical staff we believe is something we’ll be able to lay over onto the ProMedica footprint and by doing this acquisition we believe more seniors will have more opportunity to receive the highest level of end-of-life care,” Causby told Bloomberg. “We continue to invest and do alternative scheduling, we’ve done creative things with on-call and work schedules and we have a very low turnover rate.”

Gentiva has received committed-debt financing from Goldman Sachs Group Inc. to help fund the deal, a representative for Gentiva said.

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