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Subsequent Events
12 Months Ended
Dec. 30, 2016
Subsequent Events  
Subsequent Events

NOTE 13 - SUBSEQUENT EVENTS

 

Management has evaluated all events and transactions that occurred after December 30, 2016.  The following non-recognized subsequent events were noted:

 

CHS Home Health Acquisition

 

On December 31, 2016, the first day of the Company’s 2017 fiscal year, the Company acquired an 80% controlling interest in the entity holding the home health and hospice assets of Community Health Systems, Inc. (NYSE: CYH) (“CHS Home Health”).  With the completion of this transaction, the Company now operates 340 branches across 26 states.    The purchase price of $128.0 million was funded through borrowings on the Company's Revolving Credit Facility.  CHS retained the remaining 20%.  

 

Community Health Systems, Inc. ("CHS") is one of the largest publicly-traded hospital companies in the United States and a leading operator of general acute care hospitals in communities across the country.  CHS Home Health, which includes the former home health and hospice operations of CHS, provides in-home outpatient care services, including skilled nursing and acute care. CHS Home Health's operations are located primarily in the Midwest and Southern United States with a major presence in Tennessee, Florida and Texas near existing CHS hospitals.  The home health business consists of 74 separate home health agencies across 22 states and the hospice business consists of 15 separate hospice agencies across 7 states.  The Company expects to allocate the purchase price between goodwill, intangible assets, property and equipment and working capital.  

 

Stock Transaction

 

On January 19, 2017 subsequent to our fiscal year, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, pursuant to which the Company agreed to issue and sell to the Underwriters a total of 3,000 shares of the Company’s common stock, par value $0.10 per share (the “Common Stock”), plus an option to purchase up to 450 additional shares of Common Stock (“the Offering”), in a registered public offering pursuant to the Company’s shelf registration statement on Form S-3 (Registration No. 333-204584). 

On January 25, 2017, the Company sold 3,450 shares of common stock at $44.50 per share under the shelf registration statement for gross proceeds of approximately $153.5 million.  Net proceeds were approximately $144.3 million, after deducting the estimated underwriting discounts and commissions and our offering expenses. Proceeds from the offering were used to repay obligations under the revolving credit facility, which increased credit available under the Facility from approximately $78.6 million at December 30, 2016 to approximately $204 million after the offering.