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UNITED STATES
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 8, 1998
REHABCARE GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-19294 51-0265872
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
organization) Number)
7733 FORSYTH BOULEVARD
17TH FLOOR
ST. LOUIS, MISSOURI 63105
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (314) 863-7422
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ITEM 5. OTHER EVENTS
On July 10, 1998, RehabCare Group, Inc., a Delaware corporation
("RehabCare"), and Medical Resources, Inc., a Delaware corporation ("Medical
Resources"), announced that RehabCare entered into a definitive agreement to
acquire StarMed Staffing, Inc., a Delaware corporation ("StarMed"), and certain
related entities from Medical Resources (the "Acquisition"). The purchase price
of $33 million will be funded through an increase in RehabCare's bank credit
facility to $100 million. The Acquisition 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., a Massachusetts corporation
("HSSI"). With respect to RehabCare, the Acquisition is expected to be
non-dilutive to earnings in 1998 and modestly accretive to earnings beginning
in 1999.
StarMed reported revenues of approximately $58 million for the twelve
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 thirty-five offices across the United States 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 United States. With the acquisition of StarMed,
RehabCare's staffing subsidiary revenues are expected to increase by more
than 150% to approximately $120 million per year.
The foregoing description is qualified in its entirety by reference to
a copy of the press release which is attached hereto as Exhibit 99.1 and is
incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
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<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
99.1 Text of joint press release, dated July 10, 1998, issued by
RehabCare Group, Inc. and Medical Resources, Inc.
</TABLE>
2
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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.
Dated: July 10, 1998
REHABCARE GROUP, INC.
By: /s/ John R. Finkenkeller
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John R. Finkenkeller
Senior Vice President and Chief Financial
Officer
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<TABLE>
EXHIBIT INDEX
<CAPTION>
Exhibit No Description
- ---------- -----------
<S> <C>
99.1 Text of joint press release, dated July 10, 1998, issued by
RehabCare Group, Inc. and Medical Resources, Inc.
</TABLE>
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EXHIBIT 99.1
REHABCARE GROUP TO ACQUIRE STARMED STAFFING, INC. FROM MEDICAL RESOURCES;
WILL BECOME A US LEADER IN TEMPORARY NURSING STAFFING
ST. LOUIS--(BW HealthWire)--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 $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 Health Tour 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
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
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provides network management services to managed care organizations in regions
where its centers are concentrated. 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.
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
Morgan-Walke Associates:
June Filingeri/Jennifer Angell
Press: Darren Brandt
212/850-5600
or
Medical Resources, Inc.
Duane C. Montopoli, President and
Chief Executive Officer
201/488-6230
