PSA Healthcare announced that it has signed a definitive merger agreement to be acquired by a newly-formed affiliate of Bain Capital Private Equity. In December, Bain Capital Private Equity announced its entry into an agreement to acquire Epic Health Services. As a result of the transactions, PSA and Epic Health Services will combine to form a preeminent provider of pediatric home health care services. Financial terms of the transactions were not disclosed.

Under the agreement announced today, the current equity holders of PSA, including its senior management team and J.H. Whitney Capital Partners, its current majority owner, have agreed to roll over their current ownership interests into the newly-formed affiliate that will bring together world class management of two of the nation's leading, comprehensive pediatric home care providers.

The new, combined leadership would be led by current PSA Chairman Rod Windley as Executive Chairman, current PSA Chief Executive Officer Tony Strange as Chief Executive Officer, and several members of the current Epic Health Services senior management team.

Rod Windley, Chairman of PSA, said: "The combination of these two companies promises to create a unique and highly differentiated pediatric care platform that offers the highest quality care and the best clinical outcomes for our patients. Together, we have the opportunity to become the fastest growing and most efficient provider network of home care to medically fragile children in the United States. We are excited to continue the expansion of the combined business by delivering a comprehensive service model to our patients in their preferred setting – at home."

Chris Roussos, President and Chief Executive Officer of Epic Health Services, said: "This is an ideal match that will extend our geographic reach and enhance our unique pediatric care continuum and its services of private duty skilled nursing, therapy, development services, and home medical solutions, including enteral nutrition, respiratory, pharmacy, and medical supplies.  Epic and PSA are united by a shared commitment to compassionate care and clinical excellence.  I'm excited for the employees of Epic, and I see a bright future ahead for the combined companies as we continue to serve and provide for our medically fragile patients."

Chris Gordon, a Managing Director at Bain Capital Private Equity, said: "We are excited to work with both Epic Health Services and PSA to extend the combined company's comprehensive value proposition to patients and families and to continue their strong track record of growth and delivery of cost effective care.  Through our experience investing across the healthcare value chain, we know that home health care is absolutely critical to achieving better healthcare outcomes in a cost effective manner."

Steven Rodgers, a Managing Director at J.H. Whitney, said: "Our original investment in PSA reflected our strong belief in the future of the important area of home health care. The need for the kind of high quality services the combined company will provide grows every day. Rod and his team have a long track record of building great businesses both organically and through the integration of acquisitions, creating significant value in this sector. We were enthusiastic supporters of PSA and believe the combined company will be well positioned for continued profitable growth."

The Epic Health Services and PSA transactions are expected to close late in the first quarter of 2017, subject to certain regulatory approvals and satisfaction of other customary closing conditions as to each company.

Edge Healthcare Partners served as PSA's financial advisor, and Greenberg Traurig LLP as its legal advisor. Dechert LLP served as legal advisor to J.H. Whitney. Kirkland & Ellis LLP served as legal advisor to Bain Capital Private Equity.