Integrated Health, Coram Agree to Merge in $655 Million Deal
Oct. 21, 1996
OWINGS MILLS, Md. (AP) _ Integrated Health Services Inc. has agreed to acquire Coram Healthcare in a $655 million deal that the companies said would form the nation's second-largest home health company.
The combined company will operate more than 700 home health branch locations in 44 states, the companies said today in a joint release.
Integrated Health officials said the company would be the industry leader in the two largest home health sectors, home nursing and home infusion of drugs and nutrients.
Coram shareholders will get stock valued at about $280 million in the deal. Owings Mills-based Integrated Health is also assuming Coram's debt and other financial obligations, accounting for the balance of the value of the deal.
Denver-based Coram has annual revenues of $532 million and 112 locations in 43 states. The company is the largest provider of home-infusion services, the controlled delivery of intravenous fluids, including drugs and nutritional therapies.
The merged companies will bear the Integrated Health name.
Integrated Health officials said they expect the mergers to add to earnings in 1997 and thereafter.
Under the agreement, Coram stockholders will receive 0.2111 shares of Integrated Health stock for each share of Coram stock. That amount of stock is worth about $5.50.
When the merger is completed, the Integrated Health will issue 10.8 million shares of stock. The company had 23.1 million shares outstanding as of Sept. 30.
``We will now be one of the largest companies in the home care industry, which creates many economies of scale and increases our geographic coverage,'' Robert N. Elkins, chairman and CEO of Integrated Health, said in a statement. ``This will make us very attractive to managed care companies in order to obtain contracts.'''
Coram president and chief executive Don Amaral has signed a one-year agreement to remain with the company following the merger as CEO of Coram.
For 1995, Integrated Health had revenues of $1.2 billion. Coram had revenues of $603 for the same period.
Integrated Health also has negotiated a settlement to litigation between Coram and Caremark International, in which the companies each claimed that the other had made misrepresentations when Caremark sold its home infusion business to Coram in April 1995, the companies said.
Caremark has agreed to cancel $111 million in notes owed by Coram and will instead receive a two-year note for $57.5 million.