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Section 1: 8-K (8-K)

8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 9, 2018

Commission File Number: 0-24260

 

 

 

LOGO

Amedisys, Inc.

(Exact name of registrant as specified in charter)

 

 

 

Delaware   11-3131700

(State or other jurisdiction of

incorporation or organization)

 

(IRS Employer

Identification No.)

3854 American Way, Suite A, Baton Rouge, LA 70816

(Address of principal executive offices, including zip code)

(225) 292-2031 or (800) 467-2662

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


SECTION 1 – REGISTRANT’S BUSINESS AND OPERATIONS

 

Item 1.01.

Entry into a Material Definitive Agreement.

On October 9, 2018, Amedisys, Inc. (the “Company”) and Amedisys Hospice, L.L.C., a wholly-owned subsidiary of the Company, entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with Milton Heching and the Heching 2012 Exempt Irrevocable Trust, as Sellers, to acquire all of the issued and outstanding equity interests in Compassionate Care Hospice Group, Inc. (“CCH”) and its subsidiaries (collectively, the “Acquired Companies”), for a base purchase price of $340 million in cash, subject to customary purchase price adjustments based on the amount of cash of the Acquired Companies as of the closing as well as certain tax payments owed by CCH.

The Stock Purchase Agreement contains customary representations, warranties and covenants as well as indemnification provisions. An indemnification escrow fund in the amount of $28 million will be established at closing.

The transaction is subject to customary closing conditions and regulatory requirements. The parties expect to close the transaction by February 1, 2019.

SECTION 7 - REGULATION FD

 

Item 7.01.

Regulation FD Disclosure.

On October 10, 2018, the Company issued a press release announcing that it had entered into the Stock Purchase Agreement, a copy of which is furnished herewith as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference. In addition, a copy of the supplemental slides which the Company plans to use in discussions with analysts is furnished herewith as Exhibit 99.2 to this Current Report on Form 8-K and incorporated herein by reference.

The information included in this Current Report on Form 8-K under this Item 7.01 (including Exhibits 99.1 and 99.2 hereto) is being “furnished” and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of Section 18, nor shall it be incorporated by reference into a filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. The information included in this Current Report on Form 8-K under this Item 7.01 (including Exhibits 99.1 and 99.2 hereto) will not be deemed an admission as to the materiality of any information required to be disclosed solely to satisfy the requirements of Regulation FD.

SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS

 

Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit
Number

  

Description

99.1    Press release dated October 10, 2018 (furnished only)
99.2    Supplemental slides regarding the CCH transaction (furnished only)


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

AMEDISYS, INC.
By:  

/s/ Paul B. Kusserow

Paul B. Kusserow
President and Chief Executive Officer
DATE: October 10, 2018
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Section 2: EX-99.1 (EX-99.1)

EX-99.1

Exhibit 99.1

 

LOGO   

Contact:

 

Kendra Kimmons

Vice President of Marketing & Communications

225-299-3708

kendra.kimmons@amedisys.com

Amedisys Signs Definitive Agreement to Acquire

Compassionate Care Hospice

Amedisys to Become Third Largest Hospice Provider in America

BATON ROUGE, La., October 10, 2018 (GLOBE NEWSWIRE) — Amedisys, Inc. (NASDAQ:AMED), America’s leading independent home health, hospice and personal care company, announced today that it has signed a definitive agreement to acquire Compassionate Care Hospice (“CCH”), a national hospice care provider headquartered in Parsippany, New Jersey. Compassionate Care Hospice, a community-based organization founded in 1993, cares for approximately 3,300 patients daily and employs more than 2,300 hospice professionals in 53 locations across 24 states. The company generates approximately $188 million in annual revenues, with an adjusted EBITDA of $27 million.

Under the terms of the agreement, expected to close by February 1, 2019, Amedisys will acquire 100 percent of the ownership interests in CCH for a fixed price of $340 million, which is inclusive of $50 million in payments related to a tax asset and working capital. Amedisys, currently caring for more than 7,500 hospice patients per day in 22 states, will become the third largest hospice provider in America.

“By joining forces with Compassionate Care Hospice, we at Amedisys are strengthening our hospice family and gaining the privilege to build a team that can serve more patients in more places,” said Amedisys CEO and President Paul Kusserow. “This also demonstrates that we’re delivering on our promise to our shareholders and employees to expand our hospice footprint. I’m proud to welcome these outstanding caregivers into the Amedisys family as we bring together two organizations committed to patients and outstanding clinical quality.”

“In coming together with Amedisys, we’re destined to create a hospice organization that sets a new standard in the industry,” said Compassionate Care Hospice Chief Executive Officer Judy Grey. “Our mission of affirming life during its final stages by providing holistic and compassionate care to patients and their families aligns perfectly with Amedisys’ commitment to honoring life through clinical excellence.”

The transaction adds significant new access to Amedisys’ high-quality, nationwide network of 83 hospice care centers. Post-closing, the combined hospice operations will include 136 care centers in 34 states, with an ADC of approximately 11,000 patients and approximately 5,700 hospice employees.


Forward-Looking Statements

When included in this press release, words like “believes,” “belief,” “expects,” “plans,” “anticipates,” “intends,” “projects,” “estimates,” “may,” “might,” “would,” “should,” “will” and similar expressions are intended to identify forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding the expected timing of completion of the proposed acquisition of Compassionate Care Hospice and the expected effects of the completion of the proposed acquisition. These forward-looking statements involve a variety of risks and uncertainties that could cause actual results to differ materially from those described therein. These risks and uncertainties include, but are not limited to the following: our ability to close the acquisition of Compassionate Care Hospice, our ability to realize the anticipated benefits of the acquisition of Compassionate Care Hospice, changes in Medicare and other medical payment levels, our ability to open care centers, acquire additional care centers and integrate and operate these care centers effectively, changes in or our failure to comply with existing federal and state laws or regulations or the inability to comply with new government regulations on a timely basis, competition in the healthcare industry, our ability to integrate our personal care segment into our business efficiently, changes in the case mix of patients and payment methodologies, changes in estimates and judgments associated with critical accounting policies, our ability to maintain or establish new patient referral sources, our ability to attract and retain qualified personnel, changes in payments and covered services by federal and state governments, future cost containment initiatives undertaken by third-party payors, our access to financing, our ability to meet debt service requirements and comply with covenants in debt agreements, business disruptions due to natural disasters or acts of terrorism, our ability to integrate, manage and keep our information systems secure, our ability to comply with requirements stipulated in our corporate integrity agreement and changes in law or developments with respect to any litigation relating to the Company, including various other matters, many of which are beyond our control.

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on any forward-looking statement as a prediction of future events. We expressly disclaim any obligation or undertaking and we do not intend to release publicly any updates or changes in our expectations concerning the forward-looking statements or any changes in events, conditions or circumstances upon which any forward-looking statement may be based, except as required by law.

Non-GAAP Financial Measures

This press release includes a reconciliation of the most comparable financial measure calculated and presented in accordance with accounting principles generally accepted in the U.S. (“GAAP”) to non-GAAP financial measures. The non-GAAP financial measure used in this press release, as defined under SEC rules, is as follows: adjusted EBITDA of CCH, defined as net income before provision for income taxes, net interest expense and depreciation and amortization, excluding certain items. Management believes that this non-GAAP financial measure, when reviewed in conjunction with GAAP financial measures, is a useful gauge of CCH’s historical performance. This non-GAAP financial measure should be considered in addition to, and not more meaningful than or as an alternative to GAAP financial measures. Non-GAAP measures as presented herein may not be comparable to similarly titled measures reported by other companies since not all companies calculate these non-GAAP measures consistently.

About Amedisys:

Amedisys, Inc. is a leading healthcare at home Company delivering personalized home health, hospice and personal care. Amedisys is focused on delivering the care that is best for our patients, whether that is home-based personal care; recovery and rehabilitation after an operation or injury; care focused on empowering them to manage a chronic disease; or hospice care at the end of life. More than 3,000 hospitals and 59,000 physicians nationwide have chosen Amedisys as a partner in post-acute care. Founded in 1982, headquartered in Baton Rouge, LA with an executive office in Nashville, TN, Amedisys is a publicly held company. With 18,400 employees in 421 care centers in 34 states and the District of Columbia, Amedisys is dedicated to delivering the highest quality of care to the doorsteps of more than 369,000 patients and clients in need every year. For more information about the Company, please visit: www.amedisys.com.


About Compassionate Care Hospice:

Founded in 1993, Compassionate Care Hospice is a community-based organization committed to providing the highest quality hospice care to patients, their families and close friends throughout the country. We are currently located in over 20 states from the East to the West coast.

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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP MEASURES

(Amounts in thousands)

(Unaudited)

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”):

 

     For the Twelve Months
Ended May 31, 2018
 

Net income attributable to Compassionate Care Hospice

   $ 21,265  

Add:

  

Income tax expense

     2,436  

Interest expense, net

     146  

Depreciation and amortization

     43  

Certain items

     3,052  
  

 

 

 

Adjusted EBITDA (1) attributable to Compassionate Care Hospice

   $ 26,942  
  

 

 

 

 

(1)

Adjusted EBITDA is defined as net income before provision for income taxes, net interest expense and depreciation and amortization, excluding certain items.

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Section 3: EX-99.2 (EX-99.2)

EX-99.2

Slide 1

Amedisys and Compassionate Care Hospice Exhibit 99.2


Slide 2

This presentation includes forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. The use of words such as “believes,” “belief,” “expects,” “plans,” “anticipates,” “intends,” “projects,” “estimates,” “may,” “might,” “would,” “should” and similar expressions are intended to identify forward-looking statements. These forward-looking statements and all projections in this presentation are subject to risks and uncertainties and are based on the beliefs, estimates and assumptions of management and information currently available to management, which, though considered reasonable by the Company, are inherently subject to significant business, economic and competitive uncertainties beyond the Company’s control. There can be no assurance that the projected results can be realized, and actual results may differ materially from a conclusion, forecast or projection in the forward-looking information. Additional information regarding factors that could cause actual results to differ materially from those discussed in any forward-looking statements and the projections are described in reports and registration statements we file with the SEC, including our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, copies of which are available on the Amedisys internet website http://www.amedisys.com or by contacting the Amedisys Investor Relations department at (225) 292-2031. We disclaim any obligation to update any forward-looking statements or any changes in events, conditions or circumstances upon which any forward-looking statement may be based except as required by law. www.amedisys.com NASDAQ: AMED We encourage everyone to visit the Investors Section of our website at www.amedisys.com, where we have posted additional important information such as press releases, profiles concerning our business and clinical operations and control processes, and SEC filings. Forward-looking statements


Slide 3

Amedisys to acquire compassionate care hospice Deal Summary Overview Metrics Integration Timing Amedisys signs definitive agreement to acquire Compassionate Care Hospice 100% stock purchase Compassionate Care Hospice: Founded in 1993 100% founder owned Average Daily Census: 3,300 Revenue: $188M Adj. EBITDA: $27M Care Centers: 53 States: 24 Proforma for acquisitions, AMED becomes the 3rd largest hospice provider in America Adds 12 new states to AMED hospice organization $340M gross price (12.6x) $290M net price (10.7x) Net of $50M dollar for dollar payment related to tax asset and working capital Synergized Multiple: 8.0x ~$10M in synergies Overlap: Minimal overlap ~10% of ADC Balance sheet remains very flexible for continued inorganic growth opportunities: Initial leverage ratio: ~1.5x Proforma company will have significant cash generation Conversion to HCHB to begin day 1 and projected to take ~180 days Expected to see integration and HCHB implementation disruption during 1Q’19 and 2Q’19 AMED will invest in the business during 2019 to grow low ADC care centers and expand margin in large care centers Adding sales resources to accelerate growth in 2H’19 and 2020 Retention packages for key employees Care center staffing model and regional infrastructure Expect significant margin improvement throughout 2020 2021 expect margin profile similar to AMED hospice Transaction subject to customary regulatory approval Target closing: Feb 2019


Slide 4

Footprint Proforma company: 474 total care centers in 38 states and the District of Columbia Total Amedisys (post-closing) States 38 & District of Columbia Care Centers Total: 474 Employees ~20,700


Slide 1

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”): Reconciliation of non-gaap financial measures to GAAp measures For the Twelve Months Ended May 31, 2018 (Amounts in thousands) (Unaudited) Net income attributable to Compassionate Care Hospice $ 21,265 Add: Income tax expense 2,436 Interest expense, net 146 Depreciation and amortization 43 Certain items 3,052 Adjusted EBITDA1 attributable to Compassionate Care Hospice $ 26,942 Adjusted EBITDA is defined as net income before provision for income taxes, net interest expense and depreciation and amortization, excluding certain items. 5

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