Companies in the News
Companies in the News
Amedisys closer to divesting all but home nursing
Amedisys (Baton Rouge, LA) has sold two of its six ambulatory surgery centers. The centers, in Pasadena and Houston, TX, were purchased by United Surgical Partners International (Dallas). The sale resulted in $11 million net proceeds to Amedisys.
Amedisys Chairman/CEO William Borne said, "The sale of these two surgery centers is another milestone in the work toward the divestiture of our remaining four surgery centers, as well as our infusion therapy division, to become a pure play home health nursing company. By focusing on our core business, we believe the company will be positioned to take full advantage of the opportunities before us with the implementation of the Prospective Payment System, the criteria for which is expected to released in the next 60 days."
GF receives new credit facility
Graham-Field Health Products (GF; Bay Shore, NY) has entered into a commitment for a two-year senior secured revolving credit facility for $50 million of borrowings, including letters of credit, arranged by BankBoston as agent. Under the terms of the proposed credit facility, borrowings will bear interest at the bank’s alternate base rate, plus .5%. The new facility will refinance the current indebtedness under GF’s facility with IBJ Whitehall Business Credit Corp. and provide for the ongoing working capital needs of GF.
The new facility will be secured by substantially all of the assets of the company. The closing of the credit facility, anticipated for mid to late September, is subject to the execution of definitive documentation, completion of due diligence, and other customary terms and conditions. Accordingly, there can be no assurance that the financing will be completed.
GF President/CEO John McGregor said the new facility "will provide GF with about $20 million of additional liquidity, thus enabling us to move ahead with our plan to return the company to profitability."
IHS subsidiary under investigation
An Integrated Health Services (IHS; Owings Mills, MD) medical testing subsidiary in Florida is under investigation by the Department of Justice. IHS said last week that it is cooperating fully with the federal probe. The subsidiary being investigated provides tests of a patient’s swallowing function, IHS officials said.
Annualized revenue for the company’s modified barium swallow studies division throughout the country is $800,000, IHS said, and total annualized revenue for its swallow studies division throughout the country is $2 million.
Invacare declares cash dividend
Invacare’s (Elyria, OH) board has declared a cash dividend of $.0125 per share on its common shares and $.011364 per share on its Class B common shares payable on Oct. 15 to shareholders of record on Oct. 1.
Invacare also said last week it has received more than 98% acceptance of its cash tender offer to acquire Scandinavian Mobility International A/S. Starting last week, Invacare was able to begin the redemption offer period to acquire the remaining 1.9% of the shares. The total value of the transaction at this price is $146 million.
Scandinavian Mobility should be delisted from the Copenhagen exchange by Sept. 28. The offer is not being made to, nor will deposits of shares be accepted from or on behalf of, U.S. residents or shareholders in any jurisdiction, including the United States, Canada, or Japan, in which the making of the offer or acceptance thereof would not be in compliance with the laws of such jurisdiction, Invacare said.
Former McKesson CEO gets generous severance
McKesson HBOC (San Francisco) is giving former CEO Mark Pulido a severance package worth $17.5 million, according to a report in The Pink Sheet. Pulido is receiving all of his salary and benefits under an employment agreement that runs through March 31, 2004, which includes his salary, $850,000 a year, plus 100% of his annual target bonus, also $850,000 per year; lifetime medical coverage; and, eventually, executive retirement pay, reported The Pink Sheet.
Pulido resigned in June after the company disclosed reporting irregularities associated with its January merger with HBO & Co. (Atlanta). McKesson said Pulido is receiving the full value of his contract because he resigned.
Olsten to buy supplies from NJHA
Olsten Health Services (Melville, NY) has signed an exclusive agreement with the New Jersey Hospital Association Corporate Services (NJHA), a group purchasing organization. The agreement allows Olsten’s home health, alternate site, network management services, and its institutional staffing business lines to purchase pharmaceuticals and disposable medical supplies exclusively from NJHA, while maximizing savings on behalf of Olsten’s HMO, PPO, and Integrated Delivery System clients. In addition, NJHA will provide clinical consultative services regarding the creation and management of Olsten’s formularies, as well as training and education on new drugs and treatments that are available.
PSAI sells paramedical testing division
Pediatric Services of America (PSAI; Norcross, GA) has entered into a definitive agreement to sell the assets of its paramedical testing division to Hooper Holmes (Basking Ridge, NJ), a divestiture consistent with the company’s intention to focus on its core competency in home care.
The paramedical testing division generated about $90 million in revenues in 1998 through more than 200 corporate and affiliate offices in the United States. The anticipated sale price of $85 million to $95 million is subject to certain performance and other price adjustments. The transaction is also subject to closing conditions and regulatory approvals. The proceeds of the sale, PSAI said, will be used to repay a portion of the company’s outstanding debt and for working capital needs.
Standard & Poor’s (New York) lowered its corporate credit rating on PSAI to B from B+ and its rating on PSAI’s subordinated debt to CCC+ from B-.
Star Multi Care approves stock repurchase plan
Star Multi Care Services' (Huntington Station, NY) board approved last week a stock buy-back program whereby the company may purchase up to 500,000 shares of common stock in the open market throughout the next six months.
Star Multi Care CEO Stephen Sternbach said, "The company's stock price has been recently depressed due to the cloud that has been over the entire home healthcare industry. However, Star has recently completed its restructuring program whereby it has terminated its Medicare operations, has reduced staffing, and has installed new computer systems that will permit its new organization to operate more efficiently. Additionally, we have favorably resolved all of our past regulatory issues."
Star Multi Care also said its board has requested that the management of the company seek strategic alternatives to enhance and maximize shareholder value. Management's efforts will include, but not be limited to, a potential sale of business segments; a possible merger, sale, or recapitalization of the corporation; or taking the company private, officials said.
Transworld sees lower 3Q99 revenues
Transworld Healthcare (Red Bank, NJ) saw revenues in 3Q99 ended June 30 drop 5.8% to $37.5 million from $39.9 million in 3Q98. The company said it posted a net loss in 3Q99 of $4.5 million, 25 cents per share, compared to a net income in 3Q98 of $271,000, 2 cents per share. The company’s UK-based respiratory therapy, medical supplies, and nursing services business experienced favorable variances in 3Q99 of $4.9 million, Transworld officials said.
During 3Q99, the company took a pre-tax charge of $2 million and additional bad debt reserves of $3.7 million, Transworld said. n
Regional Digest
• Under a new law in Kansas, criminal background checks will become mandatory for state-licensed day care and home healthcare providers. The background checks will be available for parents’ and patients’ inspection, reported the Kansas City Star.
• The move to keep the elderly and disabled in their homes and out of long term care facilities is making headway in Iowa, reported the Des Moines Register. The number of Medicaid recipients served by home healthcare has almost doubled in the last five years, from 8,904 to 17,616, according to the Register report. And state spending accompanied that growth, from $18.2 million in 1994 to $44.4 million this year. Iowans say the expansion of home health services used in the state can be seen as a move away from what some have called the institutional bias of Medicaid, and they say the growth in home health spending is an obvious trend in an examination of the Medicaid program.
• Two weeks ago, the Associated Press reported that budget constraints in Kansas might force the state to cut its in-home medical services for hundreds of patients. The services are free to low-income, elderly patients in the state. But complaints about the seniors possibly not receiving the services, prompted Gov. Bill Graves to meet last week with his budget director and officials from the Department on Aging (DOA) and the Department of Social and Rehabilitation Services. The DOA stopped accepting new in-home care clients July 1, reported the AP. Under direction from the Kansas Legislature, the department started a waiting list of people desiring the in-home care. The list now totals 189 people, the AP reported. The meeting last week, the first of several planned, was to discuss how to manage the list. At the meeting, a spokesman for the governor said because of Kansas’ tight fiscal situation, the DOA cannot shift money from one program to another.
• Michael Taylor has been appointed executive director of home healthcare at Squamscott Visiting Nurse and Hospice Care in the Boston area. Squamscott is a home health agency affiliated with Wentworth-Douglass Hospital in Dover, MA.
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