Kindred Healthcare announced Tuesday that it had reached an agreement to purchase competitor RehabCare in a deal valued at  $1.3 billion, which includes the assumption of $400 million in debt.

The merger would create the biggest post-acute healthcare services company in the United States, with an estimated $6 billion in annual revenue and operations in 46 states, company officials said.

A Kindred spokeswoman said the deal, which is expected to close by June 30, would allow Kindred to better cover “every sector of post-acute care, and help with care transitions.”

Under the proposed deal, the new company would operate 118 long-term acute care hospitals with 8,492 licensed beds; 226 nursing and rehabilitation centers with 27,442 licensed beds; 121 inpatient rehabilitation hospitals and 1,808 hospital, nursing center and assisted living rehabilitation therapy services contracts.

Louisville-based Kindred said it would pay about $35 per share for St. Louis-based RehabCare, a 37.4% premium over Monday’s closing price of $25.47. Additionally, Kindred will issue 12 million new shares of its stock.

Also on Monday, a law firm announced that it was investigating the RehabCare board of directors for “possible breach of fiduciary duty” due to allegedly not seeking the best deal for the company, or sharing all appropriate information with shareholders. The announced deal was approved by both companies’ board of directors but is still subject to shareholder and regulatory agency approvals.