Apria Healthcare Group Inc., which has struggled with Medicare cutbacks, is planning to go private, agreeing Thursday to a $1.6-billion buyout offer from New York private equity giant Blackstone Group.
The $21-a-share deal would give shareholders in Apria, the nation's biggest provider of in-home medical care services, a 33% premium over Wednesday's closing price of $15.82.
The stock -- which last week hit its lowest level since 2000 -- soared 26.4% to $20 after the agreement was announced.
The deal is "in the best interests of our shareholders," Apria Chief Executive Lawrence M. Higby said in a statement.
Apria, based in Lake Forest, has been on the market before. It hired Morgan Stanley in 2005 to scope out potential buyers, abandoning the effort several months later.
As a privately held company, Apria would be out of Wall Street's line of vision -- and under less pressure to perform quarter to quarter. It would become one of about 50 companies in Blackstone's portfolio.
"Being private will allow us to focus more on the long-term to respond to an ever-changing healthcare environment by making aggressive technological investments and service improvements," said Lisa M. Getson, Apria's executive vice president of investor services.
The company, which sells respiratory therapy and infusion services and medical equipment for home use, has about 550 branches nationwide and more than 2 million customers. Its most recent acquisition was Coram Inc., a Denver-based home infusion and specialty pharmaceutical services provider, for $350 million in 2007.
The Blackstone offer includes about $925 million for the stock. The rest would go toward reducing Apria's $550-million debt.
Blackstone would contribute an undisclosed amount of cash, with more financing from Bank of America Corp., Wachovia Corp. and Barclays Capital. The three banks would also jointly open a $280-million credit line for Apria so it could cover tax liabilities associated with the buyout and pay down debt, Apria said.
A Blackstone spokesman said he couldn't provide additional details because the deal hadn't closed.
The investment firm manages $113.5 billion in assets, according to a regulatory filing from March.
Under terms of the agreement, Apria can solicit acquisition proposals from other companies until July 24 and would pay Blackstone a break-up fee if it accepted an alternate bid.
Analysts said other bids were unlikely.
