Lake Forest-based home healthcare provider Apria Healthcare Group Inc. is being bought and taken private by private equity investor Blackstone Group LP in a deal valued at $1.6 billion.
Shares of Apria closed up more than 25% with a market value of $877 million. Blackstone’s offer is 33% more than what Apria was valued at before the deal.
The deal appears to take into account Apria’s some $550 million in debt. The company said it’s also opening a $280 million line of credit with the deal’s underwriters to pay down debt and cover tax liabilities.
Bank of America Corp., Wachovia Corp. and Barclays PLC are financing part of the acquisition. Blackstone is using cash for the rest.
Chief Executive Larry Higby called the deal “in the best interest of shareholders.”
Apria provides breathing, drug and other treatments to patients in their homes.
Going private will shelter Apria from Wall Street’s love-hate relationship with home healthcare providers.
The company, which gets about a third of its projected 2008 revenue of $2 billion from Medicare, has seen its stock rise and fall on any bit of news about government funding for home healthcare.
In 2005, Apria looked to sell itself by hiring Morgan Stanley to contact possible buyers. It dropped the effort a few months later.
In 2007, Apria acquired Coram Inc., a Denver-based provider of drugs and feeding tubes to patients in their homes, for $350 million.
Apria at a glance:
Headquarters:
26220 Enterprise Court, Lake Forest
Employees:
13,000; 710 in OC
Business:
home healthcare services provider
Revenue for 12 months ended Dec. 31:
$1.6 billion, up 8%
Net income for 12 months ended Dec. 31:
$86 million, up 16%
Customers:
federal Medicare program, 35%, private insurers, 65%
History:
created 13 years ago with combination of Homedco Group Inc. and Abbey Healthcare Group Inc., two Orange County home health companies.
Chief executive:
Larry Higby. Joined company in 1997, promoted to CEO in 2002. Previously served as president, chief operating officer of Unocal’s 76 Products Co. Served in Nixon administration.
