HealthSouth To Buy CareSouth Home Health Agency Operations For $170 Mln

(RTTNews) - Healthcare services provider HealthSouth Corp. (HLS) announced that its Encompass Home Health operating unit agreed to acquire the home health agency operations of private healthcare company CareSouth Health System, Inc. for $170 million in cash.

The deal will enable HealthSouth to leverage the operating platform of Encompass across home health locations in the new markets of Alabama, Georgia, North Carolina, South Carolina, and Tennessee. CareSouth will also improve Encompass' market share position in the key states of Florida and Virginia.

The deal, approved by both companies' boards of directors, is expected to close in the fourth quarter of 2015, subject to regulatory approval.

CareSouth operates a portfolio of 45 home health locations in 7 states and generated revenues of about $104 million in 2014.

HealthSouth expects to fund the deal with cash on hand and borrowings under its senior secured credit facility. HealthSouth said it intends to address the effects of this deal on its adjusted EBITDA and earnings per share after the closure of the deal.