One of the largest companies in the home healthcare space will be taken over by an investment firm for $1.6 billion.
Publicly held Apria Healthcare Group Inc. on Thursday agreed to be acquired by an affiliate of the Blackstone Group.
The transaction, under which existing Apria shareholders will receive $21 in cash for each share they own, was unanimously approved by the company's board of directors this week. Apria, expected to have about $2 billion in revenue this year, operates 550 respiratory and infusion therapy locations nationwide to serve approximately 2 million patients in their homes.
"The board endorsed this transaction as being in the best interest of our shareholders," said Lawrence M. Higby, CEO and a director of Apria Healthcare. "We are excited about teaming up with Blackstone to continue pursuing our goals of growth while continually improving operating efficiencies and enhancing our service for all of the patients and customers we serve."
Under the agreement, Apria can continue to solicit competing offers until July 24. After that date and before any shareholder vote, Apria may respond to unsolicited offers. If the deal with Blackstone is not completed in lieu of an alternative offer, Apria would be obligated to pay a break-up fee to Blackstone.
Completion of the deal awaits approval by Apria shareholders and the Securities and Exchange Commission. The transaction is expected to close in the second half of 2008.
On June 18, the day before the acquisition was announced, the company's stock closed at just under $16 per share. Last July, the stock reached a 52-week high of $31.57 per share, but earlier this month the price had been halved to a low of $15.31 per share.
The transaction will be financed through a combination of equity contributed by Blackstone and debt financing from affiliates of the Bank of America, Wachovia and Barclays Capital.
After the deal is completed, Apria will become a private company that's wholly owned by Blackstone and its affiliates. The corporate headquarters of Apria Healthcare will remain in Lake Forest, Calif.; its infusion division headquarters will remain in Denver.
Apria also entered into a $280 million credit facility with affiliates of the Bank of America, Wachovia and Barclays Capital. Proceeds of the new credit facility will be used to fund potential repurchases of Apria's 3.375 percent convertible senior notes due 2033 and to pay certain tax liabilities related to those repurchases.