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US Oncology Offered $1.7 Billion Buyout

March 22, 2004

HOUSTON (AP) _ US Oncology Inc., which manages a network of cancer doctors, Monday said it agreed to be acquired by a private-equity firm in a deal the company valued at $1.7 billion, including debt.

Oiler Acquisition Corp., an affiliate of Welsh, Carson, Anderson & Stowe IX LP, an investment partnership that owns about 15 percent of the company’s stock, agreed to buy the shares it doesn’t already own for $15.05 each and take the company private.

The price represents a 19 percent premium to US Oncology’s closing stock price of $12.70 last Friday on the Nasdaq Stock Market.

News of the deal sent US Oncology’s shares surging $2.44, or 19 percent, to close at $15.14 Monday on the Nasdaq Stock Market.

The $1.7 billion total value of the deal includes outstanding stock options and assumed debt.

The amount of debt in the deal wasn’t disclosed. The company said more details about the transaction will be included in its proxy statement, expected to be filed with the Securities and Exchange Commission in the next two to three weeks.

The company’s 2003 annual report, filed earlier this month, listed debt excluding current maturities of $188.4 million.

The deal is expected to close sometime this spring.

US Oncology’s senior management, including chairman and chief executive R. Dale Ross, will continue as employees of the company.

Welsh Carson, of New York, is one of the largest private equity firms in the United States.

Houston-based US Oncology provides comprehensive services to a network of affiliated practices that include more than 875 physicians at over 470 sites in 32 states. These practices care for about 15 percent of the country’s new cancer cases each year.

The company has until April 6 to solicit other possible bidders.

If it accepts another bid, US Oncology would have to pay Welsh Carson a $12 million breakup fee.

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