BIRMINGHAM, Ala. — HealthSouth Corp. (NYSE: HLS), a Birmingham-based provider of post-acute healthcare services, has agreed to acquire CareSouth Health System Inc., an August, Ga.-based home health provider, for $170 million.
CareSouth currently operates 45 home health locations in seven states, generating $104 million in revenue last year. HealthSouth will roll the portfolio into its Encompass Home Health operating unit, where they will provide service under the new name Careity.
The portfolio expands HealthSouth’s operations into five new states — Alabama, Georgia, North Carolina, South Carolina and Tennessee — and increases its existing role in Virginia and Florida. These new home health locations will overlap with 14 of HealthSouth's existing inpatient rehabilitation hospitals, allowing a combination of home health and inpatient skilled nursing services.
The transaction was approved by both companies' boards of directors and is expected to close in the fourth quarter of 2015, subject to regulatory approval. HealthSouth plans to fund the acquisition with cash on hand and borrowings under its senior secured credit facility.