Home Health Business Quarterly: Companies in the News
Almost Family lets go of Arthur Andersen
Almost Family of Louisville, KY, which provides adult day health care services and operates the Caretenders chain of Medicare-certified home health agencies, dismissed Arthur Andersen LLP and appointed Ernst & Young LLP as its independent certifying accountants on May 30.
Andersen restated the company’s consolidated balance sheet as of March 31, 2001, and the related consolidated statement of operations, stockholders’ equity, and cash flows for the two-year period ended that date. These results are included in the company’s Form 10K for the period ending Dec. 31, 2001.
Chemed agrees to sell Patient Care Inc.
Chemed Corp. of Cincinnati has entered an agreement to sell its Patient Care Inc. subsidiary to an investor group led by Schroder Ventures Life Sciences Group for a cash payment of about $70 million. Patient Care delivers home health care services through a staff of home health aides in New York, New Jersey, and Connecticut, as well as in the South and Midwest. It had revenues of $139.2 million in 2001.
The sale will allow Chemed to focus on its residential and commercial maintenance and repair businesses, according to Kevin J. McNamara, president and CEO.
Lincare to buy back $100 million in shares
The board of Lincare Holdings, of Clearwater, FL, which provides home oxygen and other respiratory therapy services, has authorized the repurchase of up to $100 million in common shares outstanding to be made through open market or privately negotiated transactions.
The company also recently completed the remainder of a $200 million share repurchase program authorized in June 1999.
MAMSI listed on Chicago options exchange
Mid Atlantic Medical Services Inc. (MAMSI), of Rockville, MD, announced that options on the company’s stock have been listed on the Chicago Board Options Exchange. MAMSI’s subsidiaries operate in Maryland, Virginia, North Carolina, Pennsylvania, West Virginia, Delaware, and Washington, DC.
Matria Healthcare makes move with three deals
Matria Healthcare Inc. of Marietta, GA, which provides comprehensive disease management programs to health plans and employers for women’s health, diabetes, cardiovascular disease, and respiratory disorders, has signed a contract to provide comprehensive obstetrical disease management services for Healthplan Southeast members in Florida.
In addition, the company signed a definitive agreement to acquire Quality Oncology, a national provider of cancer disease management programs, as it also introduced its own disease management program to manage patients with cardiovascular disorders, fulfilling the company’s expansion strategy to manage the nation’s five most costly diseases and conditions.
Matria will pay $3 million in cash and $17 million in common stock for the acquisition, with additional financial consideration to be paid in 2004 based on 2003 operating results.
Matria also has signed a definitive agreement to buy MarketRing.com, a health care information technology company in Atlanta, for 310,000 shares, worth roughly $5.94 million.
The deal is subject to customary conditions, including third-party approvals and consents.
Transworld reorganizes and changes name
Transworld Healthcare Inc., of New York City, which provides alternate-site health care services and flexible health care staffing services in the United Kingdom through its subsidiary, Allied Healthcare Group Ltd., has entered an agreement with Allied’s minority investors.
The company will exchange its 33% minority interest for convertible preferred and common stock in Transworld, giving Transworld 100% ownership of the UK operations.
As part of the reorganization plan, subject to shareholder approval, the company will change its name to Allied Healthcare International Inc. to better reflect its new business focus. The company says the reorganization will streamline its complex corporate structure, capitalize on opportunities in the U.S. health care staffing industry, help secure more effective financial sponsorship, and possibly gain a listing on the London Stock Exchange.
Transworld’s board of directors will change from five to eight members, with two senior company executives and six outside directors — four of whom will be fully independent with no shareholder affiliation.
The new board will be the same for both the U.S. company and the UK subsidiary.
ResMed acquires Servo Magnetics Inc.
ResMed Inc. of San Diego, which develops, manufactures, and markets medical equipment to diagnose and treat sleep-disordered breathing, has acquired all outstanding shares of Servo Magnetics Inc. (SMI) of Canoga Park, CA, for approximately $32 million.
The acquisition was funded through a combination of cash and restricted ResMed common stock to qualify as a tax-free reorganization under U.S. tax law.
SMI, with revenues of $15 million for the 2001 calendar year, designs, manufactures, and distributes electric motors used in ResMed’s flow generator systems as well as in the aerospace and data storage industries.
The acquisition secured "a reliable, cost-effective source of supply for one of the most critical and expensive components of ResMed’s medical products," explains Peter C. Farrell, ResMed’s chairman and CEO.
Respironics buys Japanese company
Pittsburgh-based Respironics Inc. acquired controlling interest in Fuji, RC Co., which provides home care and hospital products and services for respiratory-impaired patients in Japan and has annual revenues of approximately $32 million.
Respironics has entered an agreement to purchase all remaining outstanding shares of Fuji by Dec. 31, 2006, at a base cash purchase price of about $12 million (with provisions for additional payment based on Fuji’s operating performance during the next four years).
The company will assume approximately $11 million in debt. The acquisition is expected to contribute $15 million to $18 million to Respironics’ annual revenues.
Respironics develops medical devices for home care, hospital, and international markets, providing programs that manage sleep-disordered breathing, chronic obstructive pulmonary disease, asthma, infant care, and restrictive lung disorders.