Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of post-acute-care service provider RehabCare Group
So what: Kindred Healthcare will pay $26 in cash and 0.471 shares of Kindred stock for each share of RehabCare. Kindred plans to pay for the acquisition and future growth by taking on around $1.9 billion in financing. The combined company will have a presence in 46 states including 118 long-term acute-care hospitals and 121 inpatient rehab hospitals.
Now what: Usually mergers and acquisitions are viewed as having a winner and a loser, but this time everyone wins. Kindred CEO Paul Diaz said the deal "will be highly accretive," meaning it will add to earnings immediately along with being a long-term strategic benefit. Long term, I love the move for Kindred and think the bigger, more highly leveraged company will provide nice returns to shareholders who decide to stick around.
Interested in more info on RehabCare Group? Add it to your watchlist.
Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.
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