DEFM14A: Aya Healthcare to Acquire Cross Country Healthcare for $615 Million

Cross Country Healthcare is set to be acquired by Aya Healthcare in a deal valued at $615 million, offering stockholders $18.61 per share in cash.

Summary

• Cross Country Healthcare, Inc. will be acquired by Aya Healthcare for $18.61 per share in cash, totaling approximately $615 million.
• The merger agreement was unanimously approved by Cross Country's board of directors.
• The offer represents a 67% premium to Cross Country's closing price on December 3, 2024, and a 68% premium to the 30-day volume-weighted average trading price.
• Stockholders will be asked to approve the merger agreement at a special meeting on February 28, 2025.
• The transaction is expected to close in the first half of 2025, subject to customary closing conditions and regulatory approvals.
• BofA Securities delivered a fairness opinion to Cross Country's board, stating that the merger consideration is fair from a financial point of view.
• Upon completion, Cross Country will become a wholly-owned indirect subsidiary of Aya Healthcare and its shares will be delisted from Nasdaq.

Sentiment

Score: 7

Explanation: The document is generally positive, highlighting the benefits of the merger for Cross Country stockholders, including the premium offered and the board's approval. However, it also acknowledges potential risks and negatives, such as the loss of public company status and tax implications.

Positives

• Stockholders will receive $18.61 per share in cash, representing a significant premium over the recent trading price.
• The merger agreement has been unanimously approved by Cross Country's board of directors.
• BofA Securities has delivered a fairness opinion, supporting the financial attractiveness of the deal.
• The transaction is expected to close relatively quickly, in the first half of 2025.

Negatives

• Cross Country will cease to be a publicly traded company and its shares will be delisted from Nasdaq.
• The merger consideration will generally be taxable to Cross Country stockholders.
• Stockholders will not have an opportunity to participate in the surviving corporation's future earnings or growth.

Risks

• The merger is subject to customary closing conditions, including regulatory approvals, which may not be obtained.
• There is a risk that the merger agreement may be terminated under certain circumstances.
• Pending lawsuits challenging the merger could prevent or delay consummation of the merger and result in substantial costs to Cross Country.

Future Outlook

The merger is expected to be completed in the first half of 2025, subject to customary closing conditions, including stockholder approval and regulatory approvals.

Management Comments

• The Cross Country board of directors has unanimously determined that the merger agreement and the transactions contemplated by the merger agreement are fair to and in the best interests of Cross Country and its stockholders.

Industry Context

The healthcare staffing industry is consolidating, with larger players seeking to expand their market share and service offerings through acquisitions.

Comparison to Industry Standards

• The merger consideration represents a 67% premium to Cross Country's closing price on December 3, 2024, and a 68% premium to the 30-day volume-weighted average trading price.
• Comparable transactions in the healthcare staffing industry have seen similar premium levels, reflecting the value of strategic acquisitions in this sector.
• AMN Healthcare Services, Inc. (AMN) is a comparable company in the healthcare staffing industry.
• The enterprise value to adjusted EBITDA multiples observed for AMN were 6.6x for 2024E and 9.2x for 2025E.

Legal Proceedings

• As of the date of this proxy statement, there are no pending lawsuits challenging the merger.
• However, potential plaintiffs may file lawsuits challenging the merger.

Stakeholder Impact

• Stockholders will receive a cash payment for their shares.
• Employees' compensation and benefits will be substantially comparable to what they received before the merger.
• The merger may impact relationships with customers, suppliers, and other business partners.

Next Steps

• Cross Country stockholders will vote on the merger agreement proposal at a special meeting on February 28, 2025.
• The parties will work to obtain required regulatory approvals.
• If approved and all conditions are met, the merger is expected to close in the first half of 2025.

Key Dates

Keywords

merger agreement, acquisition, healthcare staffing, Cross Country Healthcare, Aya Healthcare, stockholders, merger