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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
December 3, 1997
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Date of Report
(Date of earliest event reported)
Beverly Enterprises, Inc.
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(Exact name of Registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
1-9550 95-4100309
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(Commission file number) (IRS employer identification no.)
5111 Rogers Avenue
Suite 40-A
Fort Smith, Arkansas 72919
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(Address of principal executive offices) (Zip code)
(501) 452-6712
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(Registrant's telephone number, including area code)
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Item 5. Other Matters
On December 3, 1997, Beverly Enterprises, Inc. ("Beverly") and Capstone
Pharmacy Services, Inc. ("Capstone") announced that they had completed the
closing of the transactions contemplated by a definitive Agreement and Plan of
Merger dated April 15, 1997(the "Merger Agreement") which combined Beverly's
institutional pharmacy subsidiary, Pharmacy Corporation of America ("PCA") with
Capstone to create one of the nation's largest independent institutional
pharmacy company (the "Merger"). Capstone, which on December 3 changed its name
to PharMerica, Inc. ("PharMerica") issued 50 million shares of its common stock
("PharMerica Common Stock") to Beverly stockholders and assumed $275 million of
PCA debt incurred to repay Beverly for certain intercompany indebtedness.
Beverly stockholders of record on December 3 received, for each share of Beverly
Common Stock exchanged in the Merger, a fraction of a PharMerica share equal to
the quotient of 50,000,000 divided by the number of Beverly shares outstanding
on such date, or .4551 of a PharMerica share, based on the fully diluted number
of shares of Beverly Common Stock outstanding at December 3, 1997 (the
"Conversion Number"). PharMerica will pay cash in lieu of issuing fractional
shares of PharMerica Common Stock. Beverly stockholders are expected to own
approximately 57% of the issued and outstanding stock of PharMerica immediately
following the Merger.
Concurrently with execution of the Merger Agreement, Beverly, Capstone
and New Beverly Holdings, Inc. ("NBHI"), a wholly owned subsidiary of Beverly,
also completed the closing of the transactions contemplated by an Agreement and
Plan of Distribution (the "Distribution Agreement"). Under the Distribution
Agreement, Beverly transferred all of its non-PCA business, including all
related assets and liabilities (the "Remaining Health Care Business") to NBHI
in exchange for the issuance of NBHI Common Stock. Immediately thereafter, but
prior to the Merger, Beverly distributed to holders of Beverly Common Stock on
December 3 the NBHI Common Stock then owned by Beverly, on the basis of one
whole share of NBHI Common Stock for each outstanding whole share of Beverly
Common Stock (the "Distribution"). Various other agreements between Beverly and
NBHI were also consummated so as to facilitate and accomplish the separation of
PCA and its institutional pharmacy business from Beverly's Remaining Health
Care Business.
As a result of the completion of the Distribution and the Merger,
Beverly stockholders of record on December 3, 1997 have received one share of
NBHI Common Stock (reflecting an interest in the Remaining Health Care Business)
for each share of Beverly Common Stock held as of such date, and have exchanged
their shares of Beverly Common Stock for shares of PharMerica Common Stock
(reflecting an interest in the combined institutional pharmacy businesses of PCA
and Capstone) on the basis described above.
This Current Report contains forward-looking information regarding
described transactions
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and such information is being provided in connection with the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks and uncertainties
that may cause actual results to differ materially from those forecasted or
contemplated. These risks and uncertainties include national and local economic
conditions, market conditions, the effect of government regulation and the
competitive environment in which the companies operate. These and other risks
and uncertainties which could affect future results may also be addressed in
filings with the Securities and Exchange Commission by Beverly, Pharmerica and
NBHI as discussed below.
The above summary of the Merger and the Distribution is not intended to
be complete and is qualified in its entirety by reference to the detailed
provisions of the Merger Agreement and the Distribution Agreement, which are
attached as Exhibits 2.1 and 2.2, respectively to Beverly's Current Report on
Form 8-K dated April 15, 1997 and other filings made with the Commission by
Beverly, Capstone, Pharmerica and NBHI, including the Joint Proxy Statement of
Beverly and Capstone dated October 17, 1997 and the NBHI Prospectus dated
October 17, 1997. In addition, a copy of the press releases issued by Beverly in
connection with its announcement of the completion of the above-described
transaction and issued in connection with the determination of the Conversion
Number are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively.
Item 7. Financial Statements and Exhibits.
a) Financial statements of businesses acquired. Not applicable.
b) Pro forma financial information. Not applicable.
c) Exhibits.
99.1 Press release, dated December 3, 1997, issued by
Beverly Enterprises, Inc.
99.2 Press Release, dated December 10, 1997, issued by
Beverly Enterprises, Inc.
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SIGNATURE
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.
BEVERLY ENTERPRISES, INC.
/s/ PAMELA H. DANIELS
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Pamela H. Daniels
Vice President, Controller
and Chief Accounting
Officer
Date: December 18, 1997
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INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
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99.1 Press release, dated December 3, 1997, issued by Beverly
Enterprises, Inc.
99.2 Press release, dated December 10, 1997, issued by Beverly
Enterprises, Inc.
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EXHIBIT 99.1
NEWS RELEASE
Contact: Jim Griffith
Senior Vice President
Investor Relations and
Corporate Communications
(501) 484-6912
[BEVERLY ENTERPRISES LOGO]
BEVERLY ANNOUNCES COMPLETION OF
PCA / CAPSTONE MERGER
(FORT SMITH, ARKANSAS, December 3, 1997) -- Beverly Enterprises, Inc. (NYSE:BEV)
today announced the completion of the merger of Beverly's institutional
pharmacy business, Pharmacy Corporation of America (PCA), into Capstone
Pharmacy Services, Inc. The transaction was effective as of the close of
business on December 3, 1997, and the combined pharmacy companies will be
renamed PharMerica, Inc. (NASDAQ:DOSE).
Beverly stockholders of record at the effective date will receive one share of
a holding company recently organized to own all Beverly non-pharmacy
subsidiaries ("New Beverly") and approximately .44 (forty-four one-hundredths)
of a share of PharMerica for each share of Beverly they own, as a result of
Capstone issuing approximately 50 million additional shares. New Beverly will
operate under the name Beverly Enterprises, Inc. and trade on the New York
Stock Exchange and Pacific Stock Exchange using the symbol BEV. It is
anticipated that from December 4 through December 15, New Beverly stock will
trade on a "when issued" basis and that on December 16, 1997, "regular way"
trading in New Beverly stock would begin. It is anticipated that, on or about
December 12, 1997, PharMerica will mail letters to Beverly stockholders setting
forth the exact conversion number and instructions on how to exchange Beverly
shares for PharMerica shares. Beverly expects to mail stock certificates of
"New Beverly" on or about December 15, 1997.
As part of the transaction, PCA repaid $275 million of debt to Beverly. Beverly
used these proceeds to reduce its own debt. Based on the $11.3125 per share
closing price of Capstone stock on December 3, the total value of the
transaction to Beverly stockholders is approximately $840.6 million.
Beverly Enterprises is the leading provider of post-acute healthcare in the
United States. It operates 570 skilled nursing facilities, as well as
transitional acute care hospitals, assisted living centers, outpatient therapy
clinics, and home health centers. Beverly provides medical cost containment and
managed care services in a nationwide network spanning 35 states and the
District of Columbia. Additional information on the Company is available on
Beverly's Website at WWW.beverlynet.com.
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EXHIBIT 99.2
NEWS RELEASE
Contact: Jim Griffith
Senior Vice President, Investor Relations and
Corporate Communications
(501) 484-6912
[BEVERLY ENTERPRISES LOGO]
BEVERLY SETS PHARMERICA CONVERSION RATIO
(FORT SMITH, ARKANSAS, December 10, 1997) -- Beverly Enterprises, Inc.
(NYSE:BEV) today announced that Beverly shareholders of record at the close of
business on December 3, 1997 will receive .4551 shares of PharMerica common
stock for each share of Beverly stock under the previously announced merger of
Beverly's former institutional pharmacy operations into Capstone Pharmacy
Services, Inc. (now renamed PharMerica, NASDAQ:DOSE). In addition to the
PharMerica shares, Beverly stockholders also will receive one share of "new
Beverly" common stock for each share of "old Beverly" held on December 3, 1997.
Beverly's transfer agent, The Bank of New York, will begin mailing the new
Beverly stock certificates on or about December 15, 1997.
The conversion ratio of .4551 to one is based on a total of 109,873,230
outstanding shares of Beverly stock at the close of business on December 3,
1997. That total is divided into the 50 million shares to be issued by
PharMerica to holders of old Beverly stock to obtain the conversion ratio.
The conversion number of .4551 means that an "old Beverly" stockholder will be
entitled to the whole number shares of PharMerica common stock (plus cash in
lieu of any fractional share) determined by multiplying the total number of old
Beverly shares owned by each stockholder on December 3 by .4551. The cash to be
paid for fractional shares will be determined by multiplying the decimal
fraction by the arithmetic average of the last reported sale price per share of
Capstone (now PharMerica) common stock as reported on the National Association
of Securities Dealers Automated Quotation System ("NASDAQ") for the fifteen
consecutive trading days ending on November 19, 1997. PharMerica will begin
mailing materials to old Beverly stockholders on or about December 12, 1997
instructing them on how to exchange their old Beverly shares for PharMerica
shares.
more...
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Beverly Enterprises is the leading provider of post-acute healthcare in the
United States. It operates 570 skilled nursing facilities, as well as
transitional acute care hospitals, assisted living centers, outpatient therapy
clinics, and home health centers and hospice programs. Beverly provides medical
cost containment and managed care services in a nationwide network spanning 35
states and the District of Columbia. Additional information on the Company is
available on Beverly's Website at WWW.beverlynet.com.
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