Louisville-based Almost Family to merge with bigger competitor
Louisville-based Almost Family Inc. plans to merge with its slightly bigger competitor LHC Group to create a national home-health care giant that will operate in 36 states and generate $1.8 billion in annual revenue.
LOUISVILLE, Ky. (WDRB) -- Louisville-based Almost Family Inc. plans to merge with its slightly bigger competitor LHC Group to create a national home-health care giant that will operate in 36 states and generate $1.8 billion in annual revenue.
The companies called the combination a “merger of equals,” but the balance of power looks weighted to LHC.
The combined company will retain LHC’s name and be led by LHC’s CEO from LHC’s headquarters in Lafayette, La.
The company’s four-person senior management team will include only executive from Almost Family, Steve Guenthner, who hold the title of chief strategy officer. Almost Family CEO William Yarmuth will stay on as a consultant making $1.5 million annually in a four-year agreement.
Support services such as “personal care services” and “healthcare innovations” for the combined company will continue to be based in Louisville, according to a press release.
Almost Family has 310 employees at its corporate office in Louisville.
After the merger, "there will be a significant workforce in Louisville managing and supporting the Personal Care and (Home Care Innovations) Divisions of the merged companies," according to Rebecca Reid, a spokeswoman for the companies.
The companies told investors that they will get $25 million in ongoing annual savings from combining the "corporate overhead, information technology and outsourced professional services" of the two companies.
Joshua Proffitt, the chief financial officer of LHC Group, told analysts on a conference call Thursday that there will be no "field level" cost savings -- presumably meaning no front-line workers such as home health nurses will lose jobs.
"It is overhead, IT -- public company costs that you would expect," he said.
Almost Family and LHC’s combination will create the second-biggest home health care provider in the nation, behind only Louisville-based Kindred Healthcare, according to a presentation about the merger.
Executives said the merger combines two like-minded competitors with little overlapping footprint, and emphasized that the all-stock deal requires neither company to take on additional debt.
"It makes all the sense in the world; it’s the right thing to do," Yarmuth said on Thursday's call.