Gentiva Health Services — Merger or Acquisition (October 2014)
23 slides from Gentiva Health Services's merger presentation, Oct 9, 2014
Slide 1: Kindred and Gentiva: A Compelling Opportunity for American Healthcare and Shareholders
Exhibit 99.2 Kindred and Gentiva: A Compelling Opportunity for American Healthcare and Shareholders October 9, 2014
Slide 2: Forward-Looking Statements
Forward-Looking Statements Thispresentationincludes forward-looking statements within the meaningof Section27A of the SecuritiesAct of 1933, asamended,and Section21Eof the SecuritiesExchangeAct of 1934, asamended.Theseforward-looking statements include,but are not limited to, statements regardingthe
Slide 3: Kindred Is Helping to Shape the Future of American Healthcare
Kindred Is Helping to Shape the Future of American Healthcare • As the U.S. population ages, demand for patient-centered healthcare is growing rapidly –and Kindred is pioneering an integrated approach to address this demand –implementing a better model to improve clinical outcomes and patient safety
Slide 4: Transaction Summary
Transaction Summary Kindred to acquire Gentiva for $1.8 billion in a combination of cash and stock • $19.50 / share comprising $14.50 in cash and $5.00 in common stock • $1.8 billion total consideration, including assumption of net debt Purchase Price • $5.00 in Kindred common stock equates to 0.257
Slide 5: Combination Creates One of the Nation’s Premier Healthcare Services Providers
Combination Creates One of the Nation’s Premier Healthcare Services Providers The acquisition of Gentiva further strengthens Kindred’s ability to serve patients across the full continuum of care ($ in millions) Kindred Gentiva Pro Forma States(1) 47 40 47 Locations (1) 2,353 495 2,848 Employees (1)
Slide 6: Combination creates largest home health and hospice system in the United States
Combination creates largest home health and hospice system in the United States Kindred at Home Gentiva Kindred at Home Gentiva Pro Forma Company (1) (2) Revenues $352 MM Revenues $2.0 B Revenues $2.3 B (3) (3) Total States 13 Total States 40 Total States 41 (4) (4) Average Daily Census 16,100 Avera
Slide 7: Strategic and Financial Rationale
Strategic and Financial Rationale Enhances Kindred’s industry leading position as the Nation’s premier post-acute and rehabilitation services provider and creates the largest and most geographically diversified Home Health and Hospice organization in the United States Expands and enhances presence i
Slide 8: Combination Places Patient-Centered Integrated Care at the Forefront of Healthcare Reform
Combination Places Patient-Centered Integrated Care (and Kindred’s Continue the CareStrategy) at the Forefront of Healthcare Reform Helping to shape the evolution of the American Healthcare Delivery System by improving patient outcomes, smoothing care transitions and lowering costs, by transitioning
Slide 9: Acquisition Aligns with Kindred’s Five-Year Strategic Plan
Acquisition Aligns with Kindred’s Five-Year Strategic Plan Creating Value for Patients, Payors, Teammates and Shareholders 1 2 3 4 5 6 Aggressively Grow Develop Care Improve Capital Kindred at Home, Advance Integrated Succeed in The Core Reposition Portfolio Management Structure and Enhance RehabCar
Slide 10: Kindred with Gentiva Creates Multiple Platforms for Growth
Kindred with Gentiva Creates Multiple Platforms for Growth * #1 Operator of Transitional #1 Operator of #1 Operator of #8 Operator of Care Hospitals (1) Home Health and Hospice (1) Rehabilitation Services (1) Skilled Nursing Facilities (2) $2.5 billion Revenues (3) $2.3 billion Pro Forma $1.3 billio
Slide 11: Expands and Enhances Presence in Kindred’s Integrated Care Markets
Expands and Enhances Presence in Kindred’s Integrated Care Markets • Favorablegeographicfit – overlapin 20 of 23 currentand targetedIntegratedCareMarketswhich are among the top 30 MSAs in the United States • Significantpatient opportunity for improvedcaretransitions andchoice– providesrevenuesynergi
Slide 12: Diversifies Service Offerings and Revenue Mix
Diversifies Service Offerings and Revenue Mix Deepens our care management capabilities and enables us to better serve our patients while lowering costs and improving clinical outcomes KindredStandalone (1) Gentiva(2) Pro Forma (3) 6% 9% 31% 25% 35% Revenue Mix 48% (LTM 6/30/14) 37% 54% 21% 18% 16% K
Slide 13: Enhances Growth Profile
Enhances Growth Profile Combination enhances Kindred’s Revenue and Margin Growth Profiles 2014 -2015 Revenue Growth (1) 2014 EBITDA Margin (2) (1) Based upon current average analyst consensus estimates for 2014 and 2015 for both Kindred and Gentiva, including (2) $60 million of annual run rate reven
Slide 14: Synergies are Significant and Achievable
Synergies are Significant and Achievable ($ Millions) Year 1 Year 2+ Expected Cost Synergies • Ability to leverage platform for more $35 $70 efficient operations, including cost savings available in: – Corporate overhead – Supply chain – Information technology Expected Revenue Synergies $20-$30 $60+
Slide 15: Combined Company Overview
Combined Company Overview Kindred and Gentiva Pro Forma Mid Point of 2014 Guidance/Consensus ($ in millions) Expected Kindred(1) Gentiva(2) Pro Forma Synergies (3) Revenue $5,100 $1,986 $7,086 EBITDAR 716 232 $70 1,018 EBITDAR Margin 14.0% 11.7% 14.4% Rent 330 41 371 % of revenue 6.5% 2.1% 5.2% EBIT
Slide 16: Significant and Immediate Accretion to Earnings and Cash Flows
Significant and Immediate Accretion to Earnings and Cash Flows Acquisition is significantly accretive at the contemplated transaction value and financing structure on both an EPS and cash flow basis (exclusive of transaction and integration costs) Fully Integrated Run Rate Drivers for Potential Upsi
Slide 17: Financing Plan
Financing Plan Key Highlights Sources ($ millions) • Expected to issue in aggregate ~$620 – New debt financing $1,300 –$1,400 $720 million of equity to maintain reasonable leverage New equity and mandatory $200 –$300 convertible securities issued – Proactively raised $220 million in net proceeds fro
Slide 18: Capital Structure Improved and Commitment to Delever
Capital Structure Improved and Commitment to Delever Commitment to Delever Balance Sheet through Growth and Debt Pay Down Declining Rent Burden as a % of Revenue Deleveraging Profile Adjusted Debt to EBITDAR (3) Pro forma adjusted net leverage expected to be in the mid-5x range at closing with an ex
Slide 19: Next Steps
Next Steps • Definitive agreement – Required approval by Gentiva’s shareholders – State and local regulatory approvals required • Already received Hart-Scott-Rodino clearance • Integrationteamsassembledandreadyto be deployedimmediatelyupon closing • Closing expected in Q1 2015 19
Slide 20: Q&A
Mc Ine of the : | Most Kindred ) ADMIRED Healthcare Companies in the World, Six Years in a Row! 2009-2014 Q&A
Slide 21: Appendix
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Slide 22: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures This presentation includes financial measures referred to as operating income, or earnings before interest, income taxes, depreciation, amortization and rent ("EBITDAR") or earnings before interest, income taxes, depreciation and amortization ("EBITDA"). Kindred's
Slide 23: Kindred and Gentiva: A Compelling Opportunity for American Healthcare and Shareholders
Kindred and Gentiva: A Compelling Opportunity for American Healthcare and Shareholders October 9, 2014
Gentiva Health Services — Merger or Acquisition (October 2014) on 6ix