The hospice, palliative care and personal care provider Gentiva has acquired the hospice, home health and palliative assets of the nonprofit health system ProMedica.
Though Gentiva did not disclose the financial terms of the transaction, Bloomberg reported that ProMedica’s Heartland Hospice is valued at $710 million. Heartland Hospice is headquartered in Toledo, Ohio, with locations in 26 states.
“This is a significant milestone because we believe this transaction will benefit the patients and families in our care and are enthusiastic about welcoming the talented caregivers at ProMedica into the Gentiva family,” said David Causby, president and CEO of Gentiva, in a statement. “As a combined company, we plan to increase the number of caregivers and provide greater access to our care offering to more patients in the communities we serve.”
Gentiva is a portfolio company of the private equity firm Clayton, Dubilier & Rice (CDR). The Atlanta-based provider emerged from the former hospice and personal care segments of Kindred at Home. CDR last year purchased a 60% stake from the insurance mammoth Humana, Inc., (NYSE: HUM) for $2.8 billion.
The combined company will be headquartered at Gentiva’s central offices in Atlanta, with Causby remaining at the helm.
Gentiva plans to bring most of ProMedica’s hospice locations under the Heartland brand before the end of the year. The health system’s home health operations will rebrand to Heartland Home Health in early 2024. ProMedica’s palliative care business will operate under Gentiva’s Empatia Palliative Care brand.
“ProMedica is a high-quality hospice, palliative and home care provider that shares our values on compliance and putting patients first,” a Gentiva spokesperson told Hospice News.
Gentiva’s 30,000 employees care for an average of 24,000 patients daily in 36 states. The ProMedica transaction should bring that number to 34,000. The hospice provider also opened a de novo location in Mississippi this past July.
ProMedica opted to divest its home-based care assets in an effort to recover from intense financial headwinds. The organization finished 2021 in the red by $1.5 million, according to an independent audit by the accounting firm Plante & Moran. This follows a nearly $115 million shortfall the prior year, tax documents show.
In Q2 of this year, ProMedica posted a $40 million loss.
To make up the difference, the nonprofit health system has been laying off employees and selling some of its assets. Prior to the Gentiva deal, ProMedica pulled out of a joint venture with Welltower (NYSE: WELL), transferring total ownership of 147 skilled nursing facilities to its former partner.
It also closed several home health locations prior to the Gentiva transaction and canceled plans to build a new hospital in Frenchtown, Michigan.
Last month, the company also sold off its Ebeid Hospice Residence to the Hospice of Northwest Ohio for an undisclosed amount.
“By engaging in this transaction, we will be able to increase focus and resources on the other areas of our health system as we continue to provide high-quality, compassionate care and invest in our communities and dedicated caregivers,” Arturo Polizzi, president and CEO of ProMedica, said in a statement on the Welltower deal.
