BrightSpring Health Divests Community Living Business For $850 Million To Focus On Core Activities

BrightSpring Health Services, Inc. (NASDAQ: BTSG) has announced its intention to divest its Community Living business, ResCare Community Living, to Sevita, a leading provider of home and community-based specialty health care. The transaction, valued at $835 million in cash, is expected to close in 2025, subject to regulatory approvals and typical closing conditions. This strategic move aligns with BrightSpring's long-term vision of focusing on a concentrated group of customers, patients, and stakeholders, while maximizing exposure to target growth markets.

The divestment of the Community Living business is expected to bring numerous benefits to both BrightSpring and Sevita. For BrightSpring, the transaction is anticipated to be accretive to both Company and Provider Services Revenue growth and Adjusted EBITDA growth. The proceeds from the sale, approximately $715 million, will be primarily used to reduce debt, resulting in accelerated deleveraging and improved capital availability. This will enable BrightSpring to invest in growth opportunities, such as expanding its service capabilities and geographic coverage.

For Sevita, the acquiring company, the divestment presents an opportunity to continue providing compassionate care to the community living client population, ensuring the continuity of important services for individuals with intellectual and developmental disabilities (I/DD) and behavioral conditions. With the acquisition, Sevita will have the opportunity to share proven and innovative approaches with ResCare Community Living, advancing possibilities for all constituents in the market. By combining the resources and expertise of both organizations, Sevita will be positioned to support more people in need of these impactful services.

The divestment is expected to increase BrightSpring's strategic focus, operational efficiencies, and refine its payer mix. The transaction will also augment the company's expected Revenue and Adjusted EBITDA growth rates and maximize exposure to target growth markets, such as home health, rehab, primary care, hospice, and specialty and home and community pharmacy. This will drive long-term growth and value creation for the company.

In conclusion, the divestment of the Community Living business is a strategic move by BrightSpring Health Services, Inc. that aligns with its long-term vision and brings numerous benefits to both the company and Sevita, the acquiring organization. The transaction is expected to accelerate BrightSpring's deleveraging, improve capital availability, and maximize exposure to target growth markets, driving sustained growth and value creation.