Shares of Gentiva Health Services Inc. (NASDAQ: GTIV) surged more than 13% in today�s trading. The stock reached a high of $29.76 and closed 13.11% higher at $29.17. Volume was up from daily average of 234,000 to 4.17 million. Melville, New York-based Gentiva Health Services Inc. is a provider of home health services.
Gentiva today announced that it entered into a definitive merger agreement with Odyssey Healthcare Inc. (NASDAQ: ODSY). Under the terms of the agreement, Gentiva will acquire Odyssey in an all cash transaction for $1 billion or $27 per share. Gentiva expects that acquisition will create a leading hospice provider in the U.S., with a combined average daily patient census of around 14,000 and operations in 30 states. The combined companies are expected to have annual revenue of more than $1.8 billion. Gentiva expects the acquisition to be accretive to earnings within the first 12 months of the closing of the transaction.
Tony Strange, CEO of Gentiva said that the combined companies will be a leader in home health and hospice care in the U.S. Strange added that the two companies� hospice programs have very little overlap. Odyssey�s acquisition has been approved by Gentiva�s board. �The deal is likely to be closed in the third-quarter of 2010. The deal is subject to approval from regulators and Odyssey�s shareholders. Gentiva will finance the deal with new debt financing. The company has already received a financial commitment for the transaction from a syndicate of financial institutions.
Gentiva�s stock has a 52-week range of $14.50-$30.88. It has a beta of 0.74. Currently, Gentiva�s stock is trading above its 50-day and 200-day moving averages. At the moment, it has 5 Buy ratings and 6 Hold ratings. The stock will be an interesting merger play over the next few weeks.
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