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TPG may make offer for LHC Group: Reuters
Posted on Wednesday, 14 March 2012 16:52
US buyout house TPG Capital is weighing up a potential offer for LHC Group as the Louisiana-based healthcare group considers its strategic options, two people with knowledge of the development told Reuters.
These sources said the private equity firm approached LHC after the latter brought in JPMorgan Securities to advise on alternatives available to the business, but added that there was no guarantee an offer would result from the move.
Shares in the Lafayette-headquartered company rose 8 per cent following the news, trading at USD 19.82 earlier today.
Last month LHC confirmed it was undertaking a strategic review of the business with a view to enhancing shareholder value.
In its latest set of financial results, net service revenue for the fourth quarter of 2011 decreased by 5.6 per cent to USD 157.70 million compared with USD 167.10 million for the same period in 2010.
Net income for the quarter was also down to USD 7.20 million as against the USD 11.40 million achieved for Q4 2010, a decline of 36.8 per cent.
However, net service revenue for the year was up slightly at USD 633.90 million, from USD 631.60 million in 2010.
Founded in 1994, LHC provides care services in patients’ homes and in hospices, long-term acute care, and tailored healthcare from a dedicated medical professional.
Starting out as a small private company with four employees, the group has grown to become a Nasdaq-listed company employing more than 7,000 employees and catering to over 80,000 patients per year across 19 states.
Reuters noted that the home care sector is benefitting from increased life expectancy among the population, thereby creating more demand for specialised healthcare.
It added that moves such as reimbursement cuts and new Medicare regulations have had a negative impact on LHC and its peers.
TPG declined to comment on the report, while a spokesperson for LHC did not reply when Reuters requested a response.
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