Kindred Healthcare and Select Medical Holdings Corporation have entered a definitive agreement to sell and acquire hospitals from each other.
Under the agreement, Select will sell its five long-term acute care hospitals in exchange for four long-term acute care hospitals currently operated by Kindred and will receive a cash amount of $800,000 from Kindred.
Subject to customary closing conditions, including the receipt of all licensure, regulatory and other approvals, Select will transfer ownership of its facilities in Indianapolis, San Antonio and Houston, Texas, and in Denver and Colorado Springs, US, to Kindred. The units have a total of 233 beds.
In exchange, it is set to acquire hospitals operated by Kindred in Atlanta and Mishawaka, as well as two hospital facilities in Cleveland, Ohio, US, consisting of 287 beds.
The transaction process is expected to be completed during the second or third quarter of this year.
Kindred president Benjamin Breier said: "These transactions accelerate our efforts to reposition our LTAC businesses in front of LTAC patient criteria, with the goal of improving our long-term growth, profitability and financial position and improving healthcare delivery in our integrated care markets.
"These transactions allow us to sharpen our focus and enable us to better continue the care for our patients throughout a post-acute episode."
Kindred is said to leverage the shift of business units to develop new programmes to appeal to managed care organisations, as well as an opportunity to enhance the company's scale and grow patient rolls.