Abbey Home Healthcare Finishes Recapitalization Deal

Abbey Home Healthcare said Wednesday that it has wrapped up a recapitalization deal that slashed the company’s debt and boosted its equity by nearly $40 million.

As part of the recapitalization, VenTech Healthcare Corp., a publicly traded holding company in Toronto, Canada, has reduced its equity ownership of Abbey to 29%, from 57%.

The transaction reduced Abbey’s debt by $85 million, to a total of about $65 million owed to the company’s bank, and increased Abbey’s equity from a deficit of $20 million to a positive balance of $19 million, said chief financial officer Richard Rapp.

In addition to the debt reduction, Abbey received an equity infusion of $8.5 million in cash, including $2.5 million from the company’s management.

Also, a subordinated debt holder forgave a large amount of debt, Rapp said. He declined to identify the debt holder or specify how much debt was forgiven.

Abbey Home Healthcare, once a unit of the Abbey Rents company, operates in 36 states with more than 160 branches. The company rents and sells health care products, primarily hospital beds, oxygen equipment and walking aids, to people convalescing in their homes.

Abbey has had several owners since it was founded in 1924. The current owners are a group of managers who acquired the company from Baxter Travenol Corp. in a 1986 leveraged buyout, Rapp said.