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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO
SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 2)
COMMUNITY CARE OF AMERICA, INC.
(NAME OF SUBJECT COMPANY)
IHS ACQUISITION XXVI, INC.
A WHOLLY OWNED SUBSIDIARY OF
INTEGRATED HEALTH SERVICES, INC.
(Bidders)
COMMON STOCK, PAR VALUE $.0025 PER SHARE
(Title of Class of Securities)
20363B 10
(CUSIP Number of Class of Securities)
MARSHALL A. ELKINS, ESQ.
INTEGRATED HEALTH SERVICES, INC.
10065 RED RUN BOULEVARD
OWINGS MILLS, MARYLAND 21117
TELEPHONE: 410-998-8400
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidders)
COPIES TO:
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Carl E. Kaplan, Esq. Leslie A. Glew, Esq.
Fulbright & Jaworski L.L.P. Integrated Health Services, Inc.
666 Fifth Avenue 10065 Red Run Boulevard
New York, New York 10103 Owings Mills, Maryland 21117
Telephone: (212) 318-3000 Telephone: (410) 998-8400
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This Amendment No. 2 (this "Amendment") is filed to supplement and amend
the information set forth in the Tender Offer Statement on Schedule 14D-1 filed
by Integrated Health Services, Inc., a Delaware corporation ("IHS"), and IHS
Acquisition XXVI, Inc., a Delaware corporation and a wholly-owned subsidiary of
IHS (the "Purchaser"), on August 7, 1997, as amended by Amendment No. 1 filed
September 8, 1997 (as amended, the "Schedule 14D-1"), with respect to the shares
of Common Stock, par value $.0025 per share, of Community Care of America, Inc.,
a Delaware corporation (the "Company"). Unless otherwise indicated, the
capitalized terms used herein shall have the meanings specified in the Schedule
14D-1, including the Offer to Purchase attached as Exhibit (a)(1) thereto.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The information set forth in paragraphs (a) and (b) of Item 4 of the
Schedule 14D-1 is hereby amended and supplemented by the following information:
On September 15, 1997, IHS entered into a $1.75 billion revolving credit
and term loan facility with Citibank, N.A., as Administrative Agent, and certain
other lenders (the "New Credit Facility") to replace its existing $700 million
revolving credit facility. The New Credit Facility consists of a $750 million
term loan facility (the "Term Facility") and a $1 billion revolving credit
facility, including a $100 million letter of credit subfacility and a $10
million swing line subfacility (the "Revolving Facility"). The Term Facility,
all of which was borrowed on September 17, 1997, matures on December 31, 2004
and will be amortized beginning December 31, 1998 as follows: 1998 - $7.5
million; each of 1999, 2000, 2001 and 2002 - $7.5 million (payable in equal
quarterly installments); 2003 - $337.5 million (payable in equal quarterly
installments); and 2004 - $375 million (payable in equal quarterly
installments). Any unpaid balance will be due on the maturity date. The Term
Facility will bear interest at a rate equal to, at the option of IHS, either (i)
in the case of Eurodollar loans, the sum of (x) one and three-quarters percent
or two percent (depending on the ratio of IHS' Debt (as defined in the New
Credit Facility) to earnings before interest, taxes, depreciation, amortization
and rent, pro forma for any acquisitions or divestitures during the measurement
period (the "Debt/EBITDAR Ratio")) and (y) the interest rate in the London
interbank market for loans in an amount substantially equal to the amount of
borrowing and for the period of borrowing selected by IHS or (ii) the sum of (a)
the higher of (1) Citibank, N.A.'s base rate or (2) one percent plus the latest
overnight federal funds rate plus (b) a margin of one-half percent or
three-quarters of one percent (depending on the Debt/EBITDAR Ratio). The Term
Facility can be prepaid at any time in whole or in part without penalty.
The Revolving Facility will reduce to $800 million on September 30, 2001
and $500 million on September 30, 2002, with a final maturity on September 15,
2004; however, the $100 million letter of credit subfacility and $10 million
swing line subfacility will remain at $100 million and $10 million,
respectively, until final maturity. The Revolving Facility will bear interest at
a rate equal to, at the option of IHS, either (i) in the case of Eurodollar
loans, the sum of (x) between three-quarters of one percent and one and
three-quarters percent (depending on the Debt/EBITDAR Ratio) and (y) the
interest rate in the London interbank market for loans in an amount
substantially equal to the amount of borrowing and for the period of borrowing
selected by IHS or (ii) the sum of (a) the higher of (1) Citibank, N.A.'s base
rate or (2) one percent plus the latest overnight federal funds rate plus (b) a
margin of between zero percent and one-half percent (depending on the
Debt/EBITDAR Ratio). Amounts repaid under the Revolving Facility may be
reborrowed prior to the maturity date.
The New Credit Facility limits IHS' ability to incur indebtedness or
contingent obligations, to make additional acquisitions, to sell or dispose of
assets, to create or incur liens on assets, to pay dividends, to purchase or
redeem IHS' stock and to merge or consolidate with any other person. In
addition, the New Credit Facility requires that IHS meet certain financial
ratios, and provides the banks with the right to require the payment of all
amounts outstanding under the facility, and to terminate all commitments under
the facility, if there is a change in control of IHS or if any person other than
Dr. Robert N. Elkins, IHS' Chairman and Chief Executive Officer, or a group
managed by Dr. Elkins, owns more than 40% of IHS' stock. The New Credit Facility
is guaranteed by all of IHS' subsidiaries (other than inactive subsidiaries) and
secured by a pledge of all of the stock of substantially all of IHS'
subsidiaries.
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The New Credit Facility replaced IHS' $700 million credit facility (the
"Prior Credit Facility"). As a result, IHS anticipates that it will record an
extraordinary loss on extinguishment of debt of approximately $2.4 million (net
of related tax benefit of approximately $1.6 million) in the third quarter of
1997 resulting from the write-off of deferred financing costs of $4.0 million
related to the Prior Credit Facility.
IHS intends to use the proceeds from the Term Facility, as well as the
proceeds from its sale of $500 million principal amount of its 9 1/4% Senior
Subordinated Notes due 2008, to pay the purchase price for the shares of the
Company's Common Stock tendered in the Offer.
ITEM 10. ADDITIONAL INFORMATION.
Item 10(f) of the Schedule 14D-1 is hereby supplemented and amended by adding
the following information thereto:
The Expiration Date of the Offer, as extended, which was scheduled for 5:00
p.m., New York City time on Thursday, September 18, 1997, has been extended to
5:00 p.m., New York City time on Thursday, September 25, 1997, unless the Offer
is further extended.
In addition, on September 18, 1997, IHS issued a press release announcing
the extension of the Expiration Date.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(9). Press Release dated September 18, 1997, issued by Integrated
Health Services, Inc.
(b)(2). $1,750,000,000 Revolving Credit and Term Loan Agreement, dated as
of September 15, 1997, among Integrated Health Services, Inc., the
lenders named therein, Citibank, N.A., as administrative agent, The
Toronto-Dominion Bank, as documentation agent, and Citicorp
Securities, Inc., as arranger (incorporated by reference to Exhibit
10 to the Current Report on Form 8-K, dated September 15, 1997, of
Integrated Health Services, Inc.).
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SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: September 22, 1997
IHS ACQUISITION XXVI, INC.
By /s/ Brian Davidson
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Name: Brian Davidson
Title: Executive Vice President-Development
INTEGRATED HEALTH SERVICES, INC.
By /s/ Brian Davidson
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Name: Brian Davidson
Title: Executive Vice President-Development
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EXHIBIT INDEX
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EXHIBIT
NO. DESCRIPTION
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(a)(9) Press Release, dated September 18, 1997, issued by Integrated Health
Services, Inc.
(b)(2) $1,750,000,000 Revolving Credit and Term Loan Agreement, dated as of
September 15, 1997, among Integrated Health Services, Inc., the
lenders named therein, Citibank, N.A., as administrative agent, The
Toronto-Dominion Bank, as documentation agent, and Citicorp
Securities, Inc., as arranger (incorporated by reference to Exhibit
10 to the Current Report on Form 8-K, dated September 15, 1997, of
Integrated Health Services, Inc.).
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