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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
Date of Report (Date of earliest event reported): July 10, 1998
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MEDICAL RESOURCES, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 1-12461 13-3584552
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(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
155 STATE STREET, HACKENSACK, NJ 07601
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(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code: (201) 488-6230
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ITEM 5.
On July 10, 1998, Medical Resources announced that it had entered into
a definitive stock purchase agreement to sell its StarMed Staffing subsidiary to
RehabCare Group, Inc. for $33 million. A copy of the Joint Press Release issued
by the Company and RehabCare Group, Inc. is attached hereto as Exhibit 99.1 and
incorporated herein by reference.
ITEM 7. Financial Statements and Exhibits
99.1 Joint Press Release, dated July 10, 1998, issued by Medical Resources,
Inc. and RehabCare Group, Inc.
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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.
MEDICAL RESOURCES, INC.
Dated: July 10, 1998 By: /s/ Christopher J. Joyce
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Name: Christopher J. Joyce
Title: Senior Vice President
and General Counsel
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EXHIBIT 99.1
REHABCARE GROUP, INC. AND MEDICAL RESOURCES, INC.
JOINT PRESS RELEASE
CONTACT: RehabCare Group, Inc.
Alan C. Henderson, President
and Chief Executive Officer
John R. Finkenkeller,
Senior Vice President and
Chief Financial Officer
Betty Cammarata, Manager-
Investor Relations
(314) 863-7422
or
Morgen-Walke Associates:
June Filingeri/Jennifer
Angell Press: Darren Brandt
(212) 850-5600
Medical Resources, Inc.
Duane C. Montopoli,
President and Chief Executive
Officer
(201) 488-6230
FOR IMMEDIATE RELEASE
FRIDAY, JULY 10, 1998
REHABCARE GROUP TO ACQUIRE STARMED STAFFING, INC.
FROM MEDICAL RESOURCES
- Will Become a US Leader in Temporary Nursing Staffing -
ST. LOUIS, MO, JULY 10, 1998--RehabCare Group, Inc. (Nasdaq:RHBC) and
Medical Resources, Inc. (Nasdaq:MRII) today announced that RehabCare has entered
into a definitive agreement to acquire StarMed Staffing, Inc. and certain
related entities from Medical Resources. The purchase price of $33 million will
be funded through an increase in RehabCare's bank credit facility to
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REHABCARE GROUP TO ACQUIRE STARMED STAFFING, INC.
FROM MEDICAL RESOURCES PAGE 2
$100 million. The transaction is expected to be completed in late July or early
August, and will be treated by RehabCare as a purchase for accounting purposes.
StarMed will be acquired through RehabCare's wholly-owned subsidiary, Healthcare
Staffing Solutions, Inc. (HSSI). With respect to RehabCare, this acquisition is
expected to be non-dilutive to earnings in 1998 and modestly accretive to
earnings beginning in 1999.
StarMed had reported revenues of approximately $58 million for the 12
months ended December 31, 1997 and approximately $19.8 million for the three
months ended March 31, 1998. StarMed provides temporary staffing of nurses and
nurse assistants to hospitals and nursing homes on a short-term and
extended-term basis. Short-term nurse staffing is provided locally through
StarMed's 35 offices across the U.S. and the extended-term staffing provided by
StarMed's Traveling Nurses Division complements HSSI's HealthTour Division.
StarMed is one of the largest providers of temporary registered nurses in the
U.S. With the acquisition of StarMed, RehabCare's staffing subsidiary revenues
are expected to increase by more than 150% to approximately $120 million per
year.
Alan C. Henderson, President and Chief Executive Officer of RehabCare
commented, "Already a leader in temporary therapist staffing, this acquisition
will also make RehabCare a leader in temporary nurse staffing as well, and
provide critical mass for the diversification into nurse staffing begun by HSSI
in March of this year. With the 35 StarMed offices, we can now cross-sell
short-term staffing services with our traveling therapist
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REHABCARE GROUP TO ACQUIRE STARMED STAFFING, INC.
FROM MEDICAL RESOURCES PAGE 3
business. This will provide growth opportunities for HSSI's short-term therapy
staffing activities."
He further explained, "We expect job openings in nurse staffing to
accelerate due to the need to replace experienced nurses who leave the
occupation as the average age of the nursing population continues to rise. We
also expect to benefit from pressures to reduce healthcare costs, which we
believe will increase the demand for temporary staffing of both nurses and
therapists as healthcare providers reduce their base of permanent staffs and
gravitate to "just in time" staffing."
Duane C. Montopoli, President and Chief Executive Officer of Medical
Resources, stated, "As previously announced, Medical Resources retained Warburg
Dillon Read to assist it in exploring strategic alternatives for and a possible
sale of StarMed. Of the various strategic alternatives available, we believe the
sale to RehabCare represents the best value for our shareholders. Given the
obvious synergies between StarMed and Healthcare Staffing Solutions, I am also
pleased that this transaction will afford StarMed opportunities to expand its
business."
Medical Resources specializes in the ownership, operation and
management of diagnostic imaging centers. The Company operates approximately 100
imaging centers in the U. S. and provides network management services to managed
care organizations in regions where its centers are concentrated.
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REHABCARE GROUP TO ACQUIRE STARMED STAFFING, INC.
FROM MEDICAL RESOURCES PAGE 4
Through its StarMed Staffing subsidiary, Medical Resources has provided
temporary healthcare staffing to acute and subacute care facilities nationwide.
RehabCare Group, Inc., headquartered in St. Louis, is a leading
provider of acute rehabilitation, subacute, outpatient, temporary and permanent
therapist and nurse staffing services on a contract basis in conjunction with
over 750 hospitals, nursing homes and contract therapy companies in all 50 of
the United States.
Except for historical information contained herein, the statements in
this release are forward-looking statements that are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks and uncertainties
which may cause the Company's actual results in future periods to differ
materially from forecasted results.
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