In the first major asset sale from his nursing home and senior care empire, Cleveland, Tenn., businessman Forrest L. Preston announced Wednesday he will sell his Life Care Home Health business to a Lafayette., La.-based home health care firm in September.
LHC Group, Inc. a national provider of home health, hospice and comprehensive post-acute healthcare services, said it will pay $10 milllion to acquire 14 home health agencies operated by the home health care business affiliated with Preston's Life Care Centers of America.
Life Care's home health division, which was created in 1997, produced revenues of $28.5 million last year, with about 90 percent of the payments coming from Medicare. The agencies operated in seven states, but still comprised only about 1 percent of the $2.5 billion a year of revenues generated by all of Preston's Life Care businesses.
Preston said the sale will help Life Care "pursue a primary strategic focus on our core facilities-based operations."
The purchase of Life Care Home Health will increase LHC Group's geographical footprint to 352 locations across 30 states. LHC said the transaction, which is expected to close on Sept. 1, should be neutral to its earnings in 2014 and boost profits in 2015.
Preston said LHC "is a strong provider of high-quality healthcare services" and, in a memo to the home health employees affected by the sale, thanked the workers for their service.
"Your commitment to the mission of compassionate service is exemplary," Preston said in a message to employees. "We are very pleased to be selling these home health agencies to an organization that we are confident will continue to provide our patients outstanding care and service, while giving our agency employees a great place to continue their careers."
Life Care Home Health, Inc., operates facilities in Tennessee, Arizona, Colorado, Massachusetts, Rhode Island, Utah and Washington. Life Care Home Health, Inc. is a sister company of Life Care Centers of America, Inc., which provides nursing home care and long-term health care services for residents in a variety of settings, including skilled nursing homes, assisted living facilities, retirement living communities and home care.
"Life Care Home Health and Life Care Centers of America are two highly regarded healthcare companies who share a mission and culture similar to LHC Group," Keith Myers, LHC Group chairman and CEO. said in a statement. "We look forward to combining the best practices of each company with the talents and experiences of the Life Care Home Health clinicians to deliver high-quality care that allows patients to safely remain in the comfort of their homes across the 48 counties in these seven states we are honored to serve."
Contact Dave Flessner at email@example.com or at 757-6340.