UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): September 12, 1997
Merit Behavioral Care Corporation
(Exact Name of Registrant as Specified in Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
33-80987 22-3236927
(Commission (IRS Employer
File Number) Identification No.)
One Maynard Drive, Park Ridge, New Jersey 07656
(Address of Principal Executive Offices) (Zip Code)
(201) 391-8700
(Registrant's telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On September 12, 1997, Merit Behavioral Care Corporation ("MBC")
acquired all of the outstanding capital stock of CMG Health, Inc. ("CMG") (the
"Acquisition"). The Acquisition was effected through a merger of an affiliate of
MBC with CMG, as a result of which CMG became a wholly owned subsidiary of MBC.
All of the issued and outstanding capital stock of CMG were exchanged for: (1)
approximately $51.5 million in cash, (2) approximately 750,000 shares of MBC
common stock and (3) rights to receive certain additional cash and stock
consideration based upon future events and the post-closing financial
performance of CMG. The Chase Manhattan Bank and certain other lenders provided
the financing required to complete the Acquisition. The description contained
herein of the Acquisition is qualified in its entirety by reference to the
Agreement and Plan of Merger filed as Exhibit 2.1 to MBC's Current Report on
Form 8-K dated July 15, 1997, which is incorporated herein by reference.
A copy of the press release issued by MBC and CMG announcing the
consummation of the Acquisition is attached hereto as an exhibit.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
(a) Financial Statements of Business Acquired.
Not Applicable.
(b) Pro Forma Financial Information.
Not Applicable.
(c) Exhibits.
The following exhibit is filed with this Report on
Form 8-K.
Regulation S-K
Exhibit Number Exhibit
99.1 Press release dated
September 16, 1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MERIT BEHAVIORAL CARE CORPORATION
/s/ John A. Budnick
---------------------------------
John A. Budnick
Chief Financial Officer
Date: September 17, 1997
FOR IMMEDIATE RELEASE Contact: Merit Behavioral Care Corporation
Gary Mack
(630) 357-7552
CMG Health, Inc.
Mary Ann Knab
(410) 234-2464
MERIT BEHAVIORAL CARE CORPORATION
ACQUIRES
CMG HEALTH, INC.
Park Ridge, NJ and Owings Mills, MD (September 16, 1997). Merit
Behavioral Care Corporation ("MBC"), one of the nation's leading behavioral
health managed care organizations, and CMG Health, Inc. ("CMG"), a major
behavioral health managed care company, jointly announced completion by MBC of
the acquisition of all of the capital stock of CMG as of September 12, 1997 (the
"Acquisition"). The Acquisition was effected through a merger of an affiliate of
MBC with CMG, as a result of which CMG became a wholly owned subsidiary of MBC.
All of the issued and outstanding capital stock of CMG was exchanged for: (1)
approximately $51.5 million in cash, (2) approximately 750,000 shares of MBC
common stock and (3) rights to receive certain additional cash and stock
consideration based upon future events and the post-closing financial
performance of CMG. The Chase Manhattan Bank and certain other lenders provided
the financing required to complete the Acquisition.
MBC currently provides mental health and substance abuse services and
employee assistance programs to more than 18 million people and 800 clients
across all 50 states through a national network of 36,000 staff and network
providers and facilities. MBC clients include corporations and other private
employers, union trusts, insurance carriers, HMOs, Blue Cross Blue Shield
organizations and government entities.
CMG is a national managed behavioral health care company founded in
1986 with a mission to continually improve behavioral health through effective
management. CMG serves over 30 clients through a network consisting of
approximately 7,000 providers in 34 states. CMG currently covers over three
million lives under a variety of financial arrangements including full- risk
capitation, risk sharing and administration services only. Clients include state
and local governments, Blue Cross Blue Shield organizations, HMOs and insurers.
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