Palatine-based Addus HomeCare Corp. said it will sell its home health division to LHC Group, Inc. for $20 million in cash.
The sale includes 19 home health agencies and two hospice agencies in five states. Specifically, LHC Group will acquire 100 percent of the assets of the business in Arkansas, South Carolina and Nevada. In Illinois and California, LHC Group will acquire 90 percent of the business, with Addus retaining a 10 percent ownership interest in those locations.
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The business represents approximately $36.7 million in annual revenues for the twelve month period that ended Sept. 30, 2012. Net proceeds from the transaction will be used to pay off outstanding debt and for general corporate purposes.
The sale is expected to close on or about Feb. 28.
"The health care landscape is undergoing massive and rapid change as a result of health care reform and the economic imperative that we adopt new and more effective methods for serving the health care needs of those most at-risk,' said Mark Heaney, president and CEO of Addus HomeCare.
"States across the country are moving quickly to implement managed care models to serve over 9 million primarily older persons -- the dual eligible population -- who consume a disproportionately high percentage of our nation's health care resources. This transaction enables Addus to focus entirely on our home & community business and along with our demonstrated expertise in this sector, positions us to benefit significantly from the enormous opportunity to serve this large and growing, high cost population," Heaney added.
LHC Group Chairman and CEO Keith G. Myers said the addition is a good fit with the company.
" We look forward to partnering with local clinicians in these communities to deliver high-quality health care that allows patients to safely remain in the comfort of home," Myers said.
Addus expects that the home health division will be reported as a discontinued operation in its year end 2012 financial results.