HealthSouth Acquires Operations of Reliant Hospital Partners
Expands Industry Leading Portfolio of Free-Standing IRFs to 120
BIRMINGHAM, Ala. – HealthSouth Corporation (NYSE: HLS), a leading provider of post-acute services, today announced it has completed its previously announced acquisition of the operations of Reliant Hospital Partners, LLC and affiliated entities (“Reliant”) for a cash purchase price of approximately $730 million. The acquisition expands HealthSouth’s existing national network of inpatient rehabilitation hospitals with a portfolio of 11 additional inpatient rehabilitation hospitals and a total of 902 beds in Texas, Massachusetts and Ohio. In connection with the transaction, HealthSouth expects to realize a tax benefit with an estimated net present value of approximately $150 million.
“The acquisition of the operations of Reliant augments HealthSouth’s current position as a leading provider of post-acute rehabilitation services,” said HealthSouth President and Chief Executive Officer Jay Grinney. “With this acquisition, HealthSouth is able to offer comprehensive, high-quality and cost-effective facility-based and home-based care across new and existing service areas. It provides us with additional geographic coverage in Houston, Dallas-Fort Worth and Austin, while allowing us to enter new markets in Abilene, Dayton and the Greater Boston metropolitan area. It also complements our existing home health presence in all but the Dayton market.”
All of the Reliant hospitals are leased, and seven of the leases are treated as capital leases for accounting purposes. HealthSouth assumed the lease obligations of all the acquired hospitals. The amount of the capital lease obligation to be recognized on HealthSouth’s balance sheet is estimated at approximately $210 million. In 2014, Reliant’s operations generated revenues of approximately $249 million and Adjusted EBITDA of approximately $82 million.
Wells Fargo Securities, LLC acted as exclusive financial advisor to HealthSouth. Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor to HealthSouth.
HealthSouth is one of the nation’s largest providers of post-acute healthcare services, offering both facility-based and home-based post-acute services in 33 states and Puerto Rico through its network of inpatient rehabilitation hospitals, home health agencies, and hospice agencies. HealthSouth can be found on the Web at www.healthsouth.com.
Source: HealthSouth Corporation