On Monday, BrightSpring Health Services Inc (NASDAQ:BTSG) agreed to sell its Community Living business, ResCare Community Living, to Sevita for $835 million in cash.
The deal, set to close in 2025, aligns with BrightSpring’s strategic focus on enhancing its core services, including home health, hospice, primary care, rehabilitation, and pharmacy solutions.
After the divestiture, the company expects to realize additional operational efficiencies across the BrightSpring platform, with a more synergistic overall portfolio of service offerings. The transaction is expected to be accretive to both Company and Provider Services Revenue growth and Adjusted EBITDA growth.
Post-sale, BrightSpring expects its Provider Services portfolio to exhibit stronger revenue growth and adjusted EBITDA, supported by an optimized payer mix and a focus on high-demand growth markets.
The company also anticipates accelerated deleveraging, aiming to reduce its long-term debt-to-EBITDA ratio to below 3.0x.
The Community Living business, which generated approximately $1.2 billion in revenue and $128 million in adjusted EBITDA in 2024, includes 14,000 clients and 13,500 employees. BrightSpring anticipates after-tax proceeds of $715 million, which will be primarily allocated toward debt reduction, improving the company’s financial position.
The company reported preliminary 2024 sales of $11.2 billion-$11.3 billion, or a year over year increase of 26.9%- 28.0%, compared to consensus of $11.17 billion.
- Pharmacy Segment Revenue is expected to be $8.7 billion-$8.75 billion.
- Provider Segment Revenue of $2.5 billion-$2.55 billion; Community Living Revenue in 2024 is expected to be $1.2 billion.
- Adjusted EBITDA is expected to be approximately $588 million, with Community Living Adjusted EBITDA of approximately $128 million.
For 2025, the company expects sales of $11.5 billion-$12 billion compared to a consensus of $12.39 billion.
- Pharmacy Segment Revenue of $10.05 billion-$10.5 billion and Provider Segment Revenue of $1.45 billion-$1.5 billion.
- Adjusted EBITDA of $540 million- $555 million.
Price Action: BTSG stock is up 13.6% at $21.08 at last check Tuesday.
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