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Point72 Asset Management ups position in Kindred Healthcare

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Position summary

Steven Cohen’s Point72 Asset Management added to its positions in LogMeIn, Inc. (LOGM), AMC Entertainment Holdings Inc (AMC), Bloomin’ Brands Inc (BLMN), Insmed Incorporated (INSM), Kraton Performance Polymers, Inc. (KRA), Kindred Healthcare, Inc. (KND), Aegerion Pharmaceuticals, Inc. (AEGR), and Lumber Liquidators Holdings, Inc. (LL). New positions were initiated in Pier 1 Imports Inc (PIR), Stage Stores, Inc. (SSI), CymaBay Therapeutics Inc (CBAY), and Applied Genetic Technologies Corporation (AGTC).

Point72 Asset Management added to its position in Kindred Healthcare, Inc. (KND). A 13G filing in August notes that the fund owns 3,299,928 shares. This is up from the 1,572,700 shares reported in the company’s 2Q14 portfolio. The filing said the fund owns a passive 5.1% stake in Kindred.

KND

Overview of Kindred Healthcare

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Kindred is a healthcare services company. Through its subsidiaries across the United States, the company operates transitional care, or TC, hospitals, inpatient rehabilitation hospitals, or IRFs, nursing centers, assisted living facilities, a contract rehabilitation services business, and care management services.

As of June 30, 2014, the company’s hospital division operated 97 TC hospitals, with 7,145 licensed beds, and five IRFs, with 215 licensed beds, in 22 states. The company’s nursing center division operated 98 nursing centers, with 12,394 licensed beds, and six assisted living facilities, with 341 licensed beds, in 21 states.

Kindred Healthcare announces merger with Gentiva 

Kindred Healthcare said earlier this month that it’s acquiring Atlanta-based Gentiva Health Services for $19.50 per share in cash and stock. The transaction is valued at $1.8 billion, including the assumption of net debt. Kindred has identified approximately $70 million of annual-cost and operating synergies and expects to achieve the full-run rate within two years of closing.

The release said the combined entity will be a premier post-acute and rehabilitation services provider. The new company will be the largest and most geographically diversified home-health and hospice organization in the United States. It’s expected to generate pro forma annual revenues of approximately $7.1 billion.

The agreement ended the five-month pursuit of home-healthcare provider Gentiva. Kindred had made an initial $14 per share offer in May.

Posts 7% revenue increase on improved hospital volumes

Kindred’s revenues for the second quarter ended June 30, 2014, increased 7% to $1.3 billion. In comparison, the company’s revenues were $1.2 billion during the same period in 2013. Improved hospital volumes, a strong rebound in the care management division’s operations, and growth from acquisitions in 2013 explain the increase.

Excluding pre-tax charges and expenses, diluted earnings per share from continuing operations increased 26%, to $0.34. Management notes that same-store hospital admissions increased 3.1% in the second quarter, representing Kindred’s first quarterly admissions increase since 3Q 2012.

The board also approved a regular quarterly cash dividend of $0.12 per common share.

In the next part of this series, we’ll review Point72’s position increase in biopharmaceutical company Aegerion Pharmaceuticals.

 

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