The Blackstone Group has agreed to a $1.6 billion (€1 billion) take-private of home healthcare service provider Apria Healthcare Group.
The mega-buyout firm will pay Apria shareholders $21 per share, a premium of roughly 33 percent over the company's closing share price yesterday of $15.79 and a 29 percent premium over its 30 day average of $16.22.
If approved by Apria shareholders in September, the deal will close sometime in the second half of 2008, the Orange County-based company said in a statement.
The transaction will be financed through a combination of equity from Blackstone and leverage financing from Bank of America, Wachovia and Barclays Capital.
Those banks will also separately extend a $280 million credit facility to Apria, which will use the proceeds to fund repurchases of prior debt.
Blackstone declined to comment.
Apria's stock has dropped significantly amid uncertainty over whether government-provided health insurance programs like Medicare will continue to lower their compensation rates for home care services.
The company provides a range of home care services including in-house oxygen therapy for those suffering from sleep apnea and asthma, as well as doorstep delivery of medical devices such as ambulatory aids and patient-room equipment.
Apria has 550 branches scattered in all 50 states, and last year generated $1.6 billion in revenue. As of the first quarter of this year, the firm reported $1.6 billion in total assets and $1.1 billion in liabilities.
The company put itself up for sale in 2005 but withdrew the offer after only a few months. Last December, Apria expanded its services to include home intravenous infusions with the acquisition of Coram for $2.1 billion.
Blackstone currently counts several healthcare-related companies among its portfolio, including Catalent Pharma Solutions and Southern Cross, which the firm acquired for $3.2 billion and $2.2 billion, respectively.
The healthcare sector continues to provide attractive investment targets for private equity firms. Earlier this month Warburg Pincus made three times its original investment in Euromedic International, when it sold the dialysis provider and to Merrill Lynch Global Private Equity and Ares Life Sciences for $1.2 billion.