$1.25 billion for Genesis HealthCare

0 Comments | Philadelphia Inquirer, The, January, 2007 | by Bob Fernandez

Two private-equity firms have agreed to buy Genesis HealthCare Corp., of Kennett Square, one of the nation's largest nursing-home operators, which operated under bankruptcy protection earlier this decade, for $1.25 billion. The buyers, Formation Capital L.L.C. and JER Partners, also will assume $450 million in debt.

Shares in Genesis leaped 16 percent, or $8.41, to close at $61.26 yesterday in heavy trading. The private-equity firms said that they would pay $63 a share and that they had the financing to complete the deal, which also requires regulatory and shareholder approvals. Private firms see the potential to consolidate the fragmented nursing-home industry and other nonhospital health-care facilities into fewer and bigger companies, Lawton R. Burns, director of the...