Kindred subsidiary to acquire Professional HealthCare

Kindred Healthcare, Inc. (the "Company" or "Kindred") (NYSE: KND) today announced that its subsidiary has signed a definitive agreement to acquire the equity of Professional HealthCare, LLC ("Professional"), a portfolio company of Mainsail Partners, for a purchase price of $51 million in cash. Professional is a provider of home health, hospice, private duty nursing services and durable medical equipment. The Company expects to finance the transaction with operating cash flows and proceeds from its revolving credit facility. Professional will have no outstanding long-term debt at closing.

Professional operates 27 locations in northern California, Arizona, Nevada and Utah that currently generate annualized revenues of approximately $53 million. Kindred currently operates 21 nursing and rehabilitation centers and four long-term acute care hospitals within Professional's service areas. In addition, Kindred's Peoplefirst home health and hospice business currently provides home health services in San Francisco and southern California.

The transaction is subject to several regulatory approvals and other conditions to closing and is expected to close by the end of the third quarter of 2011. The Company expects that the transaction will be slightly accretive to earnings in 2012.

Paul J. Diaz, President and Chief Executive Officer of the Company, commented that, "The Professional transaction adds to the size and scale of our growing home health and hospice business. There is substantial overlap with Kindred's businesses in many of Professional's markets, which will allow us to expand our continuum of post-acute services in these cluster markets. We believe that the continued expansion of our continuum of post-acute care services in our key cluster markets supports the growing interest among patients, physicians, hospital systems and public and private payors for integrated care."

Mr. Diaz continued, "We look forward to Professional's employees joining our organization and contributing their expertise in the home health and hospice business. We in turn believe we can provide our new colleagues with enhanced opportunities for professional growth and development."

Jason Payne, Managing Partner of Mainsail Partners, stated, "We are excited for the team at Professional to be joining Kindred Healthcare, one of the most well respected healthcare service providers in the country. We are proud of the success we have had building Professional into a leading provider of healthcare services. In partnership with Professional's management team and the company's founder, we achieved consistent and substantial year-over-year growth, while maintaining our number one priority of providing the highest quality patient care available in our markets."

Source: Kindred Healthcare


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