Genesis HealthCare of Kennett Square announced Aug. 18 it is merging with Skilled Healthcare Group, Inc. of Foothill Ranch, Ca.

Company headquarters will remain in Kennett Square and George Hager, Jr., Genesis CEO, will head the newly-combined company.

“The constantly changing healthcare environment presents challenges for today’s post-acute healthcare industry providers,” said Hager. “The combination of our portfolios enables Genesis to enter the public domain, expand opportunities and enter new markets with our sub-acute and long-term care facilities and our rehabilitation services business.”

When the merger closes in early 2015, the combined company will operate under the Genesis HealthCare name and be traded on the New York Stock Exchange.  Initially, the board of directors will have representative directors from both companies and independent directors.

Skilled Healthcare Group, Inc. is a holding company with subsidiaries that operate skilled nursing facilities, assisted living facilities, a rehabilitation therapy business, hospice businesses, and home health care businesses.  Its facilities are in California, Texas, Kansas, Missouri, New Mexico, Nevada, Iowa and Nebraska.

The group says it focuses on creating a culture that attracts and retains an innovative, caring and ethical team that provides high-quality care to patients and residents.

Under the merger Skilled Healthcare shareholders will collectively own 25.75 percent of the vote and value of the fully-diluted equity of the combined company.  Genesis shareholders will own the other 74.25 percent.  The combined company would have trailing 12 months revenues (as of June 30, 2014) of more than $5.5 billion, with more than 500 facilities in 34 states and approximately 95,000 employees.  Genesis has conservatively identified $25 million in synergies in the transaction. The combined company estimated pro-forma funded net-debt is expected to be approximately $925 million and will have more than 500 facilities in 34 states.

In commenting on the merger, Tom DeRosa, CEO of Health Care REIT, Inc. said the transaction “will create a compelling and efficient post-acute delivery platform that will improve patient outcomes.”  Health Care REIT is a Genesis partner. DeRosa also said the increased scale, access to public capital and potential for improved credit metrics associated with this transaction will benefit shareholders.

Genesis was already one of the nation’s largest post-acute care providers and prior to the merger listed more than 400 skilled nursing centers and senior living communities in 28 states nationwide. Genesis also supplies rehabilitation therapy to nearly 1,400 healthcare providers in 45 states.