| Item 1.01 | Entry into a Material Definitive Agreement. |
On August 25, 2019, Addus HealthCare, Inc., an Illinois corporation (“Addus HealthCare”) and a wholly-owned subsidiary of Addus HomeCare Corporation (the “Corporation”), entered into an Equity Purchase Agreement (the “Purchase Agreement”) with (i) Hospice Partners of America, LLC, a Delaware limited liability company (“Hospice Partners”), (ii) New Capital Partners II – HS, Inc., a Delaware corporation (“New Capital HS”), (iii) Senior Care Services, LLC, a Delaware limited liability company, and Eastside Partners II, LP (collectively and together with certain other parties, the “Sellers”) and (iv) New Capital Partners II, LLC, a Delaware limited liability company, solely in its capacity asattorney-in-fact for certain of the Sellers and as the representative of the Sellers (the “Sellers’ Representative”). Pursuant to the Purchase Agreement, Addus HealthCare has agreed to directly or indirectly acquire all of the issued and outstanding securities of Hospice Partners (the “Transaction”) for a cash purchase price of $130.0 million, payable in full in cash at the closing, subject to customary adjustments for working capital and other items. Hospice Partners is a multi-state provider of hospice services headquartered in Birmingham, Alabama. Hospice Partners currently serves an average daily census of approximately 1,000 patients through 21 locations across Idaho, Kansas, Missouri, Oregon, Texas and Virginia.
The Acquisition is expected to close on or about October 1, 2019, subject to, among other customary closing conditions, the accuracy of the representations and warranties in the Purchase Agreement, compliance with the covenants in the Purchase Agreement, completion of all required regulatory approvals, and the expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. Addus Healthcare and the Sellers’ Representative are also provided certain customary termination rights.
The Sellers have made customary representations and warranties with respect to the businesses of Hospice Partners, as well as customary covenants regarding the operation of the business of Hospice Partners during the period between the execution of the Purchase Agreement and the closing. Addus Healthcare is obligated to obtain (and has already bound) representations and warranties insurance, which will comprise Addus HealthCare’s sole remedy for breaches of representations and warranties, absent fraud or intentional misrepresentation. The Purchase Agreement contains post-closing covenants restricting certain of the Sellers and certain managers and employees of Hospice Partners from competing with Hospice Partners or soliciting certain of its business relations. The duration and nature of the covenants varies according to the identity of the Seller, manager or employee. The Purchase Agreement also contains customary indemnification obligations of each party with respect to breaches of their respective covenants and certain other specified matters.
| Item 7.01 | Regulation FD Disclosure. |
On August 26, 2019, the Corporation issued the Press Release announcing the entry into the Purchase Agreement. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form8-K.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
