Kindred Healthcare Signs Definitive Agreement to Acquire Senior Home Care - One of the Largest Premier Providers of Home Health

  Kindred Healthcare Signs Definitive Agreement to Acquire Senior Home Care -
  One of the Largest Premier Providers of Home Health Care Services in Florida
  and Louisiana

 Acquisition Substantially Expands Care Management Division’s Integrated Care

     Acquired Company Operates 47 Locations in Florida and Louisiana with
                     Annualized Revenues of $143 Million

Business Wire

LOUISVILLE, Ky. -- November 4, 2013

Kindred Healthcare, Inc. (the “Company” or “Kindred”) (NYSE:KND) today
announced that it has signed a definitive agreement to acquire Senior Home
Care, Inc. (“Senior Home Care”) for a purchase price of $95 million. The
Company expects to finance the transaction with operating cash flows and
proceeds from its revolving credit facility.

Senior Home Care is a premier home health provider that operates through 47
locations in Florida and Louisiana. Senior Home Care currently generates
annualized revenues of approximately $143 million. The Company expects that
the transaction will be accretive to earnings in 2014.

More than half of Senior Home Care’s locations were named to the 2012 HomeCare
Elite, a compilation of the top-performing home health agencies in the United
States. This annual review identifies the top 25% of Medicare-certified
agencies and further highlights the top 100 and top 500 agencies overall.

In Florida, Kindred currently operates 10 Transitional Care Hospitals
(certified as long-term acute care (“LTAC”) hospitals) within Senior Home
Care’s existing service areas. In Louisiana, Kindred currently operates one
Transitional Care Hospital and, through its RehabCare division, five
hospital-based acute rehabilitation units within Senior Home Care’s existing
service areas.

The acquisition of Senior Home Care reflects another important step in the
expansion of Kindred’s Care Management Division, which includes the Company’s
home health business, Kindred at Home. Kindred continues to believe that
innovation in the delivery of coordinated, high-quality care, in and across
care settings, is critical and that this transaction further builds Kindred’s
capabilities in these areas.

Senior Home Care is a leading provider of home health in Florida and Louisiana
and Kindred is excited to partner with its seasoned and highly respected
management team to continue to grow and deliver quality outcomes for the large
and increasing number of patients in its markets (including over 4 million
Medicare beneficiaries) who can benefit from its services. Now with a leading
presence in key states including Texas, California, Florida and Ohio, Kindred
at Home has approximately 200 sites of service across 13 states and a national
presence that stretches coast-to-coast with over $350 million in annualized

The transaction is subject to regulatory approvals and other customary
conditions to closing. The Company expects to close the transaction in the
fourth quarter of 2013.

“This transaction provides us a tremendous opportunity to continue the
expansion of our post-acute services in Florida and Louisiana and supports the
growing interest among patients, physicians, hospital systems and public and
private payors for high-quality, patient-centered integrated care,” said Paul
J. Diaz, Kindred’s Chief Executive Officer.

Mr. Diaz added, “This transaction is another important example of how we are
redeploying assets from our divestiture process and repositioning Kindred with
a focus on our Integrated Care Markets and our Care Management Division,
including Kindred at Home. We look forward to Senior Home Care’s team joining
our organization and contributing their knowledge and expertise. We in turn
believe we can provide our new colleagues with enhanced opportunities for
professional growth and development within an organization that is mission and
values driven, innovative and growing.”

“Senior Home Care’s unique platform is scalable and diversified,” said
Benjamin A. Breier, Kindred’s President and Chief Operating Officer. “With a
strong reputation built on patient service, clinical expertise and focused
specialty programs, its platform includes a world class business software
solution and experience with new care delivery and managed care models and
features efficient operations and multiple growth opportunities. Senior Home
Care’s business model is characterized by attractive margins and low capital
intensity and fits well with our Continue the Care strategy in developing
Kindred’s overall operations in a number of key Integrated Care Markets in

Mr. Breier continued, “Amidst continued changes in health services broadly and
the home health sector specifically, Kindred at Home, under the Care
Management Division, is aggressively pursuing both strategic and operational
initiatives, as evidenced by this transaction, that will enable the business
to succeed and be well positioned today and in the future.”

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements regarding the
Company’s expected future financial position, results of operations, cash
flows, financing plans, business strategy, budgets, capital expenditures,
competitive positions, growth opportunities, plans and objectives of
management and statements containing the words such as “anticipate,”
“approximate,” “believe,” “plan,” “estimate,” “expect,” “project,” “could,”
“should,” “will,” “intend,” “may” and other similar expressions, are
forward-looking statements. Statements in this press release concerning the
Company’s business outlook or future economic performance, anticipated
profitability, revenues, expenses or other financial items, and product or
services line growth, together with other statements that are not historical
facts, are forward-looking statements that are estimates reflecting the best
judgment of the Company based upon currently available information.

Such forward-looking statements are inherently uncertain, and stockholders and
other potential investors must recognize that actual results may differ
materially from the Company’s expectations as a result of a variety of
factors, including, without limitation, those discussed below. Such
forward-looking statements are based upon management’s current expectations
and include known and unknown risks, uncertainties and other factors, many of
which the Company is unable to predict or control, that may cause the
Company’s actual results or performance to differ materially from any future
results or performance expressed or implied by such forward-looking
statements. These statements involve risks, uncertainties and other factors
discussed below and detailed from time to time in the Company’s filings with
the Securities and Exchange Commission.

In addition to the factors set forth above, other factors that may affect the
Company’s plans, results or stock price include, without limitation, (a) the
satisfaction of closing conditions to the transaction discussed above, (b) the
impact of healthcare reform, which will initiate significant changes to the
United States healthcare system, including potential material changes to the
delivery of healthcare services and the reimbursement paid for such services
by the government or other third party payors, including reforms resulting
from the Patient Protection and Affordable Care Act and the Healthcare
Education and Reconciliation Act (collectively, the “ACA”) or future deficit
reduction measures adopted at the federal or state level. Healthcare reform is
affecting each of the Company’s businesses in some manner. Potential future
efforts in the U.S. Congress to repeal, amend, modify or retract funding for
various aspects of the ACA create additional uncertainty about the ultimate
impact of the ACA on the Company and the healthcare industry. Due to the
substantial regulatory changes that will need to be implemented by the Centers
for Medicare and Medicaid Services (“CMS”) and others, and the numerous
processes required to implement these reforms, the Company cannot predict
which healthcare initiatives will be implemented at the federal or state
level, the timing of any such reforms, or the effect such reforms or any other
future legislation or regulation will have on the Company’s business,
financial position, results of operations and liquidity, (c) the impact of
final rules issued by CMS on August 1, 2012 which, among other things, will
reduce Medicare reimbursement to the Company’s Transitional Care (“TC”)
hospitals in 2013 and beyond by imposing a budget neutrality adjustment and
modifying the short-stay outlier rules, (d) the impact of final rules issued
by CMS on July 29, 2011 which significantly reduced Medicare reimbursement to
the Company’s nursing centers and changed payments for the provision of group
therapy services effective October 1, 2011, (e) the impact of the Budget
Control Act of 2011 (as amended by the American Taxpayer Relief Act of 2012
(the “Taxpayer Relief Act”)) which will automatically reduce federal spending
by approximately $1.2 trillion split evenly between domestic and defense
spending. An automatic 2% reduction on each claim submitted to Medicare began
on April 1, 2013, (f) the impact of the Taxpayer Relief Act which, among other
things, reduces Medicare payments by 50% for subsequent procedures when
multiple therapy services are provided on the same day. At this time, the
Company believes that the rules related to multiple therapy services will
reduce the Company’s Medicare revenues by $25 million to $30 million on an
annual basis, (g) changes in the reimbursement rates or the methods or timing
of payment from third party payors, including commercial payors and the
Medicare and Medicaid programs, changes arising from and related to the
Medicare prospective payment system for LTAC hospitals, including potential
changes in the Medicare payment rules, the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003, and changes in Medicare and
Medicaid reimbursement for the Company’s TC hospitals, nursing centers,
inpatient rehabilitation hospitals and home health and hospice operations, and
the expiration of the Medicare Part B therapy cap exception process, (h) the
effects of additional legislative changes and government regulations,
interpretation of regulations and changes in the nature and enforcement of
regulations governing the healthcare industry, (i) the ability of the
Company’s hospitals to adjust to potential LTAC certification and medical
necessity reviews, (j) the costs of defending and insuring against alleged
professional liability and other claims (including those related to pending
whistleblower and wage and hour class action lawsuits against the Company) and
the Company’s ability to predict the estimated costs and reserves related to
such claims, including the impact of differences in actuarial assumptions and
estimates compared to eventual outcomes, (k) the impact of the Company’s
significant level of indebtedness on the Company’s funding costs, operating
flexibility and ability to fund ongoing operations, development capital
expenditures or other strategic acquisitions with additional borrowings, (l)
the Company’s ability to successfully redeploy its capital and proceeds of
asset sales in pursuit of its business strategy and pursue its development
activities, including through acquisitions, and successfully integrate new
operations, including the realization of anticipated revenues, economies of
scale, cost savings and productivity gains associated with such operations, as
and when planned, including the potential impact of unanticipated issues,
expenses and liabilities associated with those activities, (m) the Company’s
ability to pay a dividend as, when and if declared by the Board of Directors,
in compliance with applicable laws and the Company’s debt and other
contractual arrangements, (n) the failure of the Company’s facilities to meet
applicable licensure and certification requirements, (o) the further
consolidation and cost containment efforts of managed care organizations and
other third party payors, (p) the Company’s ability to meet its rental and
debt service obligations, (q) the Company’s ability to operate pursuant to the
terms of its debt obligations, and comply with its covenants thereunder, and
its ability to operate pursuant to its master lease agreements with Ventas,
Inc. (NYSE:VTR), (r) the condition of the financial markets, including
volatility and weakness in the equity, capital and credit markets, which could
limit the availability and terms of debt and equity financing sources to fund
the requirements of the Company’s businesses, or which could negatively impact
the Company’s investment portfolio, (s) the Company’s ability to control
costs, particularly labor and employee benefit costs, (t) the Company’s
ability to successfully reduce or mitigate (by divestiture of operations or
otherwise) its exposure to professional liability and other claims, (u) the
Company’s obligations under various laws to self-report suspected violations
of law by the Company to various government agencies, including any associated
obligation to refund overpayments to government payors, fines and other
sanctions, (v) the potential for diversion of management time and resources in
seeking to transfer the operations of 60 non-strategic nursing centers
currently leased from Ventas, Inc., (w) national and regional economic,
financial, business and political conditions, including their effect on the
availability and cost of labor, credit, materials and other services, (x)
increased operating costs due to shortages in qualified nurses, therapists and
other healthcare personnel, (y) the Company’s ability to attract and retain
key executives and other healthcare personnel, (z) the Company’s ability to
successfully dispose of unprofitable facilities, (aa) events or circumstances
which could result in the impairment of an asset or other charges, such as the
impact of the Medicare reimbursement regulations that resulted in the Company
recording significant impairment charges in 2012 and 2011, (bb) changes in
generally accepted accounting principles or practices, and changes in tax
accounting or tax laws (or authoritative interpretations relating to any of
these matters), and (cc) the Company’s ability to maintain an effective system
of internal control over financial reporting.

Many of these factors are beyond the Company’s control. The Company cautions
investors that any forward-looking statements made by the Company are not
guarantees of future performance. The Company disclaims any obligation to
update any such factors or to announce publicly the results of any revisions
to any of the forward-looking statements to reflect future events or

About Kindred Healthcare

Kindred Healthcare, Inc., a top-125 private employer in the United States, is
a FORTUNE 500 healthcare services company based in Louisville, Kentucky, with
annual revenues of approximately $6 billion and approximately 72,000 employees
in 46 states. At June 30, 2013, Kindred through its subsidiaries provided
healthcare services in 2,167 locations, including 116 transitional care
hospitals, six inpatient rehabilitation hospitals, 169 nursing centers, 24
sub-acute units, 105 Kindred at Home hospice, home health and non-medical home
care locations, 103 inpatient rehabilitation units (hospital-based) and a
contract rehabilitation services business, RehabCare, which serves 1,644
non-affiliated facilities. Ranked as one of Fortune magazine’s Most Admired
Healthcare Companies for five years in a row, Kindred’s mission is to promote
healing, provide hope, preserve dignity and produce value for each patient,
resident, family member, customer, employee and shareholder we serve. For more
information, go to You can also follow us on
Twitter and Facebook.


Kindred Healthcare, Inc.
Richard A. Lechleiter, 502-596-7734
Executive Vice President and
Chief Financial Officer
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