GENESIS HEALTH VENTURES INC /PA
8-K, 1996-06-06
SKILLED NURSING CARE FACILITIES
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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): June 5, 1996



                          GENESIS HEALTH VENTURES, INC.
             (Exact name of Registrant as specified in its charter)
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<CAPTION>
<S>                                         <C>                                         <C>  

            Pennsylvania                                   1-11666                                    06-1132947
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  (State or other jurisdiction of                  (Commission File Number)                        (I.R.S. Employer
   incorporation or organization)                                                               Identification Number)

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                              148 West State Street
                       Kennett Square, Pennsylvania 19348
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          (Address of principal executive offices, including zip code)




  Registrant's telephone number, including area code:        (610) 444-6350
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Item 5.  Other Events.

         On June 5, 1996, Genesis Health Ventures, Inc. ("Genesis"), pursuant to
a Stock Purchase Agreement and Merger Agreement entered into on April 1, 1996
(the "Acquisition Agreements"), (a) purchased from Michael Bronfein, Jessica
Bronfein, Stanton Ades and Renee Ades (the "Sellers") all of the outstanding
shares of capital stock of Medical Services Group, Inc., a Maryland corporation
("MSG"), CareCard, Inc., a Maryland corporation ("CCI"), Transport Services,
Inc., a Maryland corporation ("TSI") and NeighborCare Pharmacies, Inc., a
Maryland corporation ("NCP"), (b) purchased from The Chase Manhattan Bank, N.A.
("Chase") warrants held by Chase exercisable for the purchase of approximately
11% of the capital stock of each of MSG, CCI, TSI and NCP, (c) acquired by
merger Professional Pharmacy Services, Inc., a Maryland corporation ("PPS") and
(d) in connection with such merger, had the outstanding warrants to acquire
shares of PPS capital stock held by Chase canceled. MSG, CCI, TSI, NCP and PPS
are referred to hereinafter collectively as NeighborCare. Based in Baltimore,
Maryland, NeighborCare operates institutional and retail pharmacy and infusion
therapy businesses.

         The total consideration paid by Genesis was approximately $57.3
million, including assumed debt. The purchase price was comprised of
approximately $47.3 million in cash, a portion of which was used to repay
assumed debt, and 312,744 shares of Genesis Common Stock and is subject to
post-closing adjustments.

         NCP is a defendant in a civil antitrust action in the United States
District Court for the District of Maryland filed February 20, 1996, by
Merck-Medco Managed Care, Inc. ("Merck-Medco") against NCP and four other
pharmacy companies (the "Pharmacy Defendants"). The Complaint alleges that the
State of Maryland awarded a contract to Merck-Medco to administer the
prescription drug benefits for certain Maryland State employees and their
families (the "Maryland Network"). The Complaint also alleges that the Pharmacy
Defendants refused to participate in, and boycotted, the Maryland Network and
that, as a result of Pharmacy Defendants' actions, the State of Maryland
terminated the Medco contract. The Complaint further alleges that the Pharmacy
Defendants actions constituted a violation of federal and state anti-trust laws
and tortious interference with contract. Plaintiff seeks, inter alia, injunctive
relief and compensatory and punitive damages, including treble damages. The
Pharmacy Defendants have filed answers to the Complaint denying liability. In
addition, the Federal Trade Commission has commenced an investigation to
determine whether persons engaged in the provision of pharmacy services in
Maryland, including, inter alia, NCP and the other Pharmacy Defendants, have
engaged in unlawful concerted activities for the purpose of increasing
reimbursement rates or otherwise restricting competition in the provision of
prescription drug services. The Sellers have agreed to indemnify the Company for
losses (other than losses over $100,000 and less than $250,000) related to the
above-referenced actions; however, there can be no assurance that the Sellers
will have sufficient assets to make any required payments under the
indemnification agreement. The Company believes, based upon representations made
by NeighborCare, that NCP has defenses to the claims, intends to vigorously
defend such claims and believes, in light of the foregoing and the
indemnification provisions, that any amount paid or accrued with respect to
these matters will not have a material adverse effect on the financial position
or results of operations of the Company. However, there can be no assurance as
to the outcome of these matters and that they will not have a material adverse
effect on the financial position or results of operations of the Company.



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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.

                                       GENESIS HEALTH VENTURES, INC.



                                       By: /s/ George V. Hager, Jr.
                                          ----------------------------------
                                          George V. Hager, Jr.
                                          Senior Vice President and
                                          Chief Financial Officer


Date: June 6, 1996

















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