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: February 18, 1997
HEALTHSOUTH Corporation
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(Exact Name of Registrant as Specified in its Charter)
Delaware 1-10315 63-0860407
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State or Other (Commission (I.R.S. Employer
Jurisdiction of Incorporation File Number) Identification No.)
or Organization)
One HealthSouth Parkway
Birmingham, Alabama 35243
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(Address of Principal (Zip Code)
Executive Offices)
Registrant's Telephone Number,
Including Area Code: (205) 967-7116
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Item 5. OTHER EVENTS
On February 18, 1997, HEALTHSOUTH Corporation, a Delaware corporation
(the "Company"), entered into a Plan and Agreement of Merger with Horizon/CMS
Healthcare Corporation, a Delaware corporation ("Horizon/CMS"), pursuant to
which a wholly-owned subsidiary of the Company will be merged into Horizon/CMS,
with Horizon/CMS to be the surviving corporation. Under the terms of the Plan
and Agreement of Merger, Horizon/CMS stockholders will be entitled to receive
0.42169 of a share of Company Common Stock for each share of Horizon/CMS Common
Stock held by them. The estimated value of the transaction, which will be
accounted for as a purchase, is approximately $1.6 billion (including the
assumption of approximately $700 million in debt). As a result of the merger,
the Company will acquire 33 inpatient rehabilitation hospitals, 58 specialty
hospitals and subacute units, 282 outpatient rehabilitation facilities, 267
long-term care facilities that Horizon/CMS owns, leases or manages, a contract
therapy business holding 1,400 contracts, an institutional pharmacy business
serving 38,500 beds, and other healthcare services. The ageement provides for
the payment to HEALTHSOUTH of a $35 million break-up fee plus actual expenses of
up to $5 million if the transaction is terminated by Horizon/CMS under certain
circumstances and Horizon/CMS is thereafter the subject of another acquisition
transaction. The consummation of the transaction is subject to the expiration or
termination of the waiting period required under the Hart-Scott-Rodino Antitrust
Improvements Act, and to certain other regulatory approvals. Subject to such
approvals, the transaction currently is expected to close in mid-1997, or as
soon as practicable after the receipt of such approvals.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
21. Form of press release issued by HEALTHSOUTH Corporation in
connection with the above-described transaction.
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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.
Date: February 19, 1997
HEALTHSOUTH Corporation
By:
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William W. Horton
Senior Vice President
and Corporate Counsel
NEWS FROM
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HEALTHSOUTH(R)
FOR IMMEDIATE RELEASE
FEBRUARY 18, 1997
HEALTHSOUTH CORPORATION SIGNS DEFINITIVE MERGER AGREEMENT TO
ACQUIRE HORIZON/CMS HEALTHCARE CORPORATION
BIRMINGHAM, Alabama, and ALBUQUERQUE, New Mexico. . . HEALTHSOUTH Corporation
(NYSE:HRC) and Horizon/CMS Healthcare Corporation (NYSE:HHC) announced today the
signing of a definitive agreement pursuant to which HEALTHSOUTH will acquire
Horizon/CMS in a stock-for-stock merger in which the stockholders of Horizon/CMS
will receive 0.42169 of a share of HEALTHSOUTH Common Stock per share of
Horizon/CMS Common Stock. HEALTHSOUTH operates the nation's largest network of
rehabilitation facilities, while Horizon/CMS operates the second-largest. The
proposed transaction, valued at approximately $1.6 billion (including the
assumption of approximately $700 million in debt), will add Horizon/CMS's 33
inpatient rehabilitation hospitals, 58 specialty hospitals and subacute units
and 282 outpatient rehabilitation locations to HEALTHSOUTH's existing network of
over 1,000 patient care locations in 50 states, reinforcing HEALTHSOUTH's
position as the nation's leading provider of outpatient surgery and
rehabilitative healthcare services. Horizon/CMS also owns, leases, or manages
267 long-term care facilities, a contract therapy business holding 1,400
contracts, an institutional pharmacy business serving 38,500 beds, and other
healthcare services.
Richard M. Scrushy, Chairman of the Board and Chief Executive Officer of
HEALTHSOUTH, stated, "We are very excited to add the rehabilitation operations
of Horizon/CMS, which strengthen our Integrated Service Model and further
enhance our ability to market our services to insurers, managed care plans and
self-insured employers. Horizon/CMS's rehabilitation services will add 12 new
markets in which we can provide both outpatient surgery and rehabilitation
services. The non-rehabilitation lines of business operated by Horizon/CMS will
continue to be managed from Albuquerque while we evaluate strategic alternatives
with respect to those lines. We believe that this transaction will be very
positive for the stockholders of both companies as well as to the patients and
payors served by our respective facilities. Further, we expect this acquistion
to be accretive to 1997 earnings per share, and we believe that the
opportunities for revenue enhancement and synergies are comparable to those that
we were able to obtain in our other significant acquisitions in the
rehabilitation industry."
Neal M. Elliott, Chairman of the Board, President and Chief Executive Officer of
Horizon/CMS, said, "Horizon/CMS is particularly pleased to be joining forces
with HEALTHSOUTH. We look forward to working together to continue to provide
low-cost, high-quality healthcare services to our constituencies. The management
of Horizon/CMS considers this an excellent opportunity for its stockholders to
participate in the growth that lies ahead in the new healthcare environment."
Elliott will join HEALTHSOUTH's Board of Directors upon consummation of the
transaction.
--more--
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NEW FROM
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HEALTHSOUTH(R)
The transaction, which is subject to the approval of Horizon/CMS's stockholders
and which does not require a vote of HEALTHSOUTH's stockholders, is expected to
be treated as a tax-free reorganization and will be accounted for as a purchase.
Consummation of the transaction is subject to various regulatory approvals,
including clearance under the Hart-Scott-Rodino Antitrust Improvements Act, and
to the satisfaction of certain other conditions. The agreement provides for the
payment to HEALTHSOUTH of a $35 million break-up fee plus actual expenses of up
to $5 million if the transaction is terminated by Horizon/CMS under certain
circumstances and Horizon/CMS is thereafter the subject of another acquisition
transaction. The parties currently anticipate that the transaction will be
consummated in mid-1997.
Smith Barney Inc. is acting as financial advisor to HEALTHSOUTH, and Merrill
Lynch & Co. is acting as financial advisor to Horizon/CMS.
Statements contained in this press release which are not historical facts are
forward-looking statements. In addition, the parties, through their senior
management, may from time to time make forward-looking public statements
concerning the matters described herein. Such forward-looking statements are
necessarily estimates reflecting the best judgment of the party making such
statements based upon current information and involve a number of risks and
uncertainties. Certain factors which could affect the accuracy of such
forward-looking statements are identified in the public filings made by each
party with the Securities and Exchange Commission, and forward-looking
statements contained in this press release or in other public statements of the
parties should be considered in light of those factors. There can be no
assurance that such factors or other factors will not affect the accuracy of
such forward-looking statements.
####
For more information contact:
At HEALTHSOUTH: Richard M. Scrushy, Chairman of the Board and
Chief Executive Officer, Aaron Beam, Jr., Executive Vice President
and Chief Financial Officer, or Michael D. Martin, Executive
Vice President and Treasurer, at (205) 967-7116
Media Contact: Anthony J. Russo, Noonan/Russo Communications
(212) 696-4455 Ext. 202
At Horizon/CMS: Michael H. Seeliger, Vice President, Investor
and Corporate Relations, at (505) 878-6351
