Post-acute care provider Genesis HealthCare announced Wednesday it has signed an agreement to sell the majority of its home health and hospice operations to Compassus, a nationwide network of community-based hospice and palliative care programs, for $84 million.
The transaction is expected to close within the next 90 days, subject to regulatory approvals and other customary closing conditions.
Genesis' home health and hospice operations -- which were acquired during its February 2015 combination with Skilled Healthcare -- are located in California, Idaho, Montana and New Mexico. In 2015, its businesses had aggregate revenue and earnings totaling approximately $70 million and $9 million, respectively. Any remaining hospice operations in Arizona and Nevada will be closed.
[Also: Dueling star ratings may confuse some home health patients]
"Home health and hospice services are non-strategic businesses for Genesis to operate at this time, and we believe we can better allocate the capital by de-levering our balance sheet," said Genesis CEO George Hager Jr. in a statement.
Genesis said it may monetize other non-strategic assets; including the home health and hospice businesses, they're expected to generate $100 to $150 million of after-tax cash proceeds. Genesis intends to use the sale proceeds to repay indebtedness.
Compassus CEO James Deal said in a statement that the deal bolsters the company's ability to deliver more post-acute care "to even more patients, families and the healthcare professionals who serve them."
Twitter: @JELagasse