Monday, May 19, 2014

Targeting Gentiva: Kindred Board Involvement


Kindred's offer for Gentiva went through their Board Strategic Development Committee.  Kindred's most recent Def14a states:

The Strategic Development Committee has six members consisting of Ms. Phyllis R. Yale (Chair), Mr. Joel Ackerman, Thomas P. Cooper, M.D., Mr. John H. Short, Ph.D., Mr. Paul J. Diaz and Mr. Edward L. Kuntz. As previously noted, Mr. Kuntz has notified the Company that he does not wish to stand for re-election to the Board of Directors,and his term as a member of the Strategic Development Committee will expire upon the conclusion of the Annual Meeting. With the exception of Messrs. Diaz, Short and Kuntz, each member of the Strategic Development Committee is independent as defined under the listing standards of the NYSE. The Strategic Development Committee held one meeting during 2013. The Strategic Development Committee assists the Board of Directors and management in the development and evaluation of the Company’s business and strategic initiatives

Rest assured this group met more than once in 2014 in its pursuit of Gentiva.  Chair Phyliss Yale spent nearly three decades with Bain & Company helping to build Bain's healthcare portfolio.  Yale is familiar with highly leveraged companies like Gentiva and knows how to wreak "efficiencies."  Joel Ackerman spent over a decade with another private equity firm Warburg Pincus, also specializing in healthcare.

Gentiva purchased Harden's home health, hospice and community care businesses from a private equity firm.  Gentiva's CFO told Wall Street analysts they paid a premium for Harden's assets.

Gentiva's latest investor presentation showed the company's preference for growth by acquisitions.  Kindred shares the same strategy.  Gentiva's not ready to be bait, at least not willingly.


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