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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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) April 20, 1999 (April 19,
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1999)
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HEALTHCARE FINANCIAL PARTNERS, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-21425 58-1844418
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
2 Wisconsin Circle, Fourth Floor, Chevy Chase, Maryland 20815
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (301) 961-1640
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
On April 19, 1999, the Registrant issued two press releases filed as Exhibit
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99.1 and Exhibit 99.2 hereto, which are incorporated by reference herein.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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(c) Exhibits
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99.1 Text of Press Release dated April 19, 1999.
99.2 Text of Press Release dated April 19, 1999.
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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.
HEALTHCARE FINANCIAL PARTNERS, INC.
Date: April 20, 1999 By: /s/ Edward P. Nordberg, Jr.
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Edward P. Nordberg, Jr.
Chief Financial Officer
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EXHIBIT INDEX
Exhibit
Number Description
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99.1 Text of Press Release dated April 19, 1999.
99.2 Text of Press Release dated April 19, 1999.
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Exhibit 99.1
FOR IMMEDIATE RELEASE Contact:
John K. Delaney, CEO
HealthCare Financial Partners, Inc.
(301)-961-1640
Heller Financial to Acquire HealthCare Financial Partners
for $35.00 per Share in a Stock and Cash Transaction
CHEVY CHASE, MD, April 19, 1999--HealthCare Financial Partners, Inc.
(NYSE:HCF) and Heller Financial, Inc. (NYSE:HF) jointly announced today that the
two companies have reached a definitive agreement pursuant to which Heller will
acquire HealthCare Financial Partners for $35.00 per share in a stock and cash
transaction. The closing of the transaction is anticipated to occur in July,
1999, subject to receipt of customary regulatory approvals, approval by
Healthcare Financial Partners' shareholders, and approval by Heller's Board of
Directors, which is anticipated on Wednesday, April 21.
The total purchase price will equal approximately $483 million, of which
41% will be in the form of Heller common stock and 59% will be in cash. The
stock portion of the purchase price will be tax free to HCF's shareholders.
Formed in 1993, HealthCare Financial Partners is a rapidly growing commercial
finance company exclusively focused on providing secured financing to small- and
mid-sized healthcare providers throughout the U.S. The Chevy Chase, MD company
had total assets of $533 million at March 31, 1999.
"We are very excited about the acquisition of HealthCare Financial
Partners," said Richard J. Almeida, Chairman and Chief Executive Officer of
Heller. "The transaction makes
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Heller the leading provider of financing to small and middle-market healthcare
companies and brings to Heller an outstanding management team with a
demonstrated track record of delivering substantial growth and profitability.
This acquisition is an important strategic expansion of Heller's domestic
commercial finance business and gives us unmatched access to the dynamic
healthcare sector."
Healthcare Financial Partners will become one of Heller's major domestic
business units. When combined with Heller's existing healthcare finance
activities, the unit will have loan commitments in excess of $900 million, over
260 client relationships and comprehensive product capabilities covering working
capital, acquisition, cash flow, equipment and real estate financing. John
Delaney, Chairman and Chief Executive Officer of HealthCare Financial Partners,
will become a Group President of Heller and will assume management
responsibility for the unit. Delaney will be joined by the other key members of
the HealthCare Financial Partners management team who have also agreed to join
Heller. Heller expects the transaction to be neutral to modestly accretive to
earnings per share in 1999 and significantly accretive in 2000.
Mr. Delaney said, "The combination with Heller is a superior outcome for
our shareholders, employees and customers. It allows HealthCare Financial
Partners to further accelerate its dynamic growth by giving our business a
substantially stronger balance sheet, lower costs of funds and access to
Heller's real estate, cash flow and equipment finance capabilities within the
healthcare market segment. Both HealthCare Financial Partners and Heller
provide sophisticated commercial finance to growing companies, and we therefore
believe the fit between the two companies is extraordinary. We share a common
operating philosophy, and anticipate product synergies which will allow the
combined business to continue building a very significant
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and lasting competitive advantage. Finally, we believe that this transaction
creates significant shareholder value, as Heller's stock, in our opinion, is
very attractively valued compared to its peers."
The transaction will involve the issuance of approximately 7.6 million
shares by Heller. The final number of shares to be issued will be based on the
average closing price of Heller's common stock during 10 trading days shortly
before closing, subject to both a minimum and a maximum stock price.
HealthCare Financial Partners, Inc. is a specialty finance company offering
asset-based and related financing to healthcare providers with a primary focus
on clients operating in sub-markets of the healthcare industry, including long-
term care, hospitals, and physician practices. HealthCare Financial Partners
also provides asset-based financing to clients in other sub-markets of the
healthcare industry, including pharmacies, durable medical equipment suppliers,
home healthcare, mental health providers, contract research organizations, and
other providers of finance and management services to the healthcare industry.
HealthCare Financial Partners targets small and middle-market healthcare service
providers with financing needs in the $100,000 to $30 million range in
healthcare sub-markets which have favorable characteristics for working capital
financing, such as those where growth, consolidation or restructuring appear
likely in the near to medium term.
Heller Financial, Inc. is a worldwide commercial finance company providing
a broad range of financing solutions to middle-market and small business
clients. With $14 billion in owned and managed assets, Heller offers equipment
financing and leasing, vendor and sales finance programs, factoring and working
capital loans, collateral- and cash flow-based financing,
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and financing for commercial real estate. The Company also offers trade finance,
factoring, asset-based lending, leasing and vendor finance products and programs
to clients in Europe, Asia, Australia and Latin America. Heller's common stock
is listed as "HF" on the New York and Chicago Stock Exchanges.
Certain statements made herein are or may be deemed to be forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. No assurances can be given
that any predicted results will actually be achieved and actual results could
differ materially from those predicted as the result of the factors discussed in
the Company's periodic reports filed with the Securities and Exchange
Commission.
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Exhibit 99.2
FOR IMMEDIATE RELEASE
Contact:
Edward P. Nordberg, Jr., CFO
HealthCare Financial Partners, Inc.
(301) 961-1640
HEALTHCARE FINANCIAL PARTNERS
REPORTS FIRST QUARTER RESULTS
Per Share Earnings Up 32.4% From First Quarter 1998
CHEVY CHASE, MD, April 20, 1999--HealthCare Financial Partners, Inc.
(NYSE:HCF), a commercial finance company providing financing to healthcare
companies, today reported revenues and earnings for the first quarter ended
March 31, 1999.
For the first quarter of 1999, fee and interest income from finance
receivables (revenue) was $17,276,000 compared to $12,305,000 for the first
quarter of 1998, a 40.4% increase. Net income was $6,140,000 compared to
$3,621,000 last year, a 69.6% increase. Diluted earnings per share were 45
cents compared to 34 cents for the first quarter of 1998.
In addition, HCF ended March 1999 with approximately $480 million in
finance receivables, up from $437 million at December 31, 1998.
HealthCare Financial Partners also announced today that it has entered into
an agreement with Heller Financial, Inc. providing for the acquisition of HCF by
Heller, subject to the approval of HCF shareholders and certain other
conditions. Goldman Sachs & Co. acted as the
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exclusive financial advisor to HCF in this transaction. In light of the
agreement with Heller, HCF has cancelled the previously scheduled conference
call which was to be held on April 20, 1999 to discuss its first quarter results
and has postponed its annual stockholder meeting. A special meeting of
stockholders will be scheduled at a later date to vote upon the Heller
transaction. HealthCare Financial Partners REIT, Inc. will not be acquired by
Heller.
HealthCare Financial Partners, Inc. is a commercial finance company
providing financing and related services to healthcare providers.
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Statements of Income
For the quarter ended
March 31,
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1999 1998
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Fee and interest income
Fee and interest income from finance receivables............................................... $17,275,634 $12,304,780
Other interest income.......................................................................... 284,729 187,176
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Total fee and interest income............................................................ 17,560,363 12,491,956
Interest expense................................................................................ 4,370,059 3,800,254
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Net fee and interest income.............................................................. 13,190,304 8,691,702
Provision for losses on receivables............................................................. 862,150 651,014
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Net fee and interest income after provision
for losses on receivables.............................................................. 12,328,154 8,040,688
Other operating income
Commissions on REIT originations......................................................... 987,500
Asset management income.................................................................. 60,000
Consulting income........................................................................ 114,147 118,050
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Total other operating income............................................................. 1,161,647 118,050
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Total operating income................................................................... 13,489,801 8,158,738
Operating expenses.............................................................................. 3,889,845 2,613,657
Other income.................................................................................... 553,179 516,252
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Reit management income.......................................................................... -
Reit management expense.........................................................................
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Income before income taxes...................................................................... 10,153,135 6,061,333
Income taxes.................................................................................... 4,013,081 2,440,771
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Net income...................................................................................... $ 6,140,054 $ 3,620,562
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Basic earnings per share........................................................................ $ 0.46 $ 0.35
Basic weighted average shares outstanding....................................................... 13,419,709 10,283,279
Diluted earnings per share...................................................................... $0.45 $0.34
Diluted weighted average shares
outstanding.................................................................................... 13,675,790 10,668,910
Balance Sheet Data
As of As of
March 31, March 31,
1999 1998
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Total assets.................................................................................... $ 534,676,055 $329,078,095
Net finance receivables......................................................................... 468,851,893 295,483,183
Client holdbacks................................................................................ 4,436,788 5,862,486
Line of Credit.................................................................................. 20,091,218 19,384,923
Commercial paper facility....................................................................... 128,207,727 19,126,743
CP conduit facility............................................................................. 69,965,000
Warehouse facility.............................................................................. 42,874,427 44,767,800
Total liabilities............................................................................... 280,766,759 99,232,640
Stockholders' equity............................................................................ 253,909,296 229,845,455
Other Data
Number of loans to
clients........................................................................................ 240 234
Number of clients being provided financing at period end (1).................................... 209 206
Allowance for losses on receivables as a percentage of finance receivables...................... 1.5% 1.1%
Yield on finance receivables (2)(3)............................................................. 15.2% 17.1%
Efficiency ratio (4)............................................................................ 20.8% 20.7%
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(1) Includes 64 and 80 clients who are affiliates of one or more other clients
at March 31, 1999 and 1998, respectively
(2) Fee and interest income divided by monthly average finance receivables
(3) Calculated on an annualized basis
(4) Year to date operating expenses divided by total fee and interest income on
finance receivables plus other operating income
