<PAGE>
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): August 2, 1999
GENESIS HEALTH VENTURES, INC.
-----------------------------
(Exact name of Registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Pennsylvania 1-11666 06-1132947
- ------------------------------------ --------------------------------- ---------------------------------
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or Identification Number)
organization)
</TABLE>
101 East State Street
Kennett Square, Pennsylvania 19348
----------------------------------
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (610) 444-6350
---------------
<PAGE>
Item 5. Other Events.
On August 2, 1999, Genesis Health Ventures, Inc. announced that it
reached an agreement with The Cypress Group and Texas Pacific Group related to
the restructuring of the Multicare joint venture. See press release attached
hereto as Exhibit 99.1.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements
None.
(b) Pro Forma Financial Information
None.
(c) Exhibits
99.1 Press Release dated August 2, 1999
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/ IRA C. GUBERNICK
--------------------
Vice President - Office of the Chairman
and Corporate Secretary
Date: August 10, 1999
---------------
<PAGE>
EXHIBIT 99.1
PRESS RELEASE
Genesis Health Ventures Announces Revision of Multicare Joint Venture
---------------------------------------------------------------------
The Cypress Group and Texas Pacific Group to Invest $50 Million in GHV
----------------------------------------------------------------------
KENNETT SQUARE, PA-(BW Health Wire)-Aug.2, 1999--Genesis Health
Ventures, Inc. (NYSE:GHV - news) announced today that it has reached an
agreement in principle with The Cypress Group and Texas Pacific Group (TPG), its
co-investor partners in Genesis ElderCare Corp. (the joint-venture parent of The
Multicare Companies), to simplify the joint-venture structure, accelerate the
integration of Genesis and Multicare, and strengthen the financial position of
both entities.
Under the agreement in principle, Cypress and TPG will invest $50
million into GHV in exchange for 12.5 million newly issued common shares and 2
million warrants with a $5.00 exercise price.
In addition, Cypress and TPG will terminate their right to put their
56% equity interest in Genesis ElderCare Corp. to GHV in exchange for a newly
issued convertible preferred stock in GHV with a $420 million principal amount,
a 5% dividend rate (payable in kind for the first five years) and a conversion
price of $8.75 per share.
The conversion price represents a 153% premium to the 20-day average
trading price of GHV stock.
Following completion of this transaction, GHV will consolidate the
results of Multicare for financial reporting purposes. After making the $50
million investment, Cypress and TPG will each own approximately 11% of GHV. On
fully-diluted basis, assuming conversion of the convertible preferred stock,
Cypress and TPG will each own approximately 29% of GHV.
The agreement in principle provides that Cypress and TPG will each have
the right to vote a maximum of 17.5% of the voting rights of GHV. Cypress and
TPG will each designate one member to the GHV Board of Directors, increasing the
total membership to nine. The transaction is subject to, among other things,
regulatory approval and GHV shareholder approval.
"Our Partners at Cypress and TPG have clearly taken a long-term
perspective towards Genesis," said Michael Walker, Genesis Chairman and Chief
Executive Officer.
"We share a common vision of the proactive strategies required to
succeed in the prospective payment environment and enthusiasm for the long-term
opportunities for the Company. We will continue to aggressively manage through
the transition to a prospective payment system, improve our financial
flexibility through additional deleveraging transactions and sharpen our focus
on our core business segments within specified geographic regions."
"We continue to believe that Genesis is the premier provider of
long-term care services," said Jamie Singleton, Vice-Chairman of The Cypress
Group. "We believe that the toughest part of the
1
<PAGE>
transition to prospective pay is now behind us. By utilizing the strength of the
Genesis management team, its regionally concentrated assets and strategic
alliances, we believe Genesis will emerge as a long-term leader as the industry
grows and consolidates."
"The simplification of the Genesis/Multicare structure facilitates
enhanced operational integration, asset rationalization and expanded capital
raising opportunities. Together, we can implement a plan to further strengthen
the combined balance sheet and create a platform for success," said James
Coulter, founding partner of TPG.
Walker continued, "We continue to remain focused on reducing corporate
and regional costs, pursuing approximately $200 million of additional
deleveraging transactions and providing our customers with high-quality
healthcare services. With this transaction, we can eliminate the confusion and
uncertainty regarding the Multicare joint-venture structure and move forward in
a more rationalized manner. I look forward to working with our partners at
Cypress and TPG, as we continue to improve the Company's long-term position."
Merrill Lynch & Co. acted as financial advisor to GHV in connection
with this transaction.
Genesis Health Ventures, Inc., a recognized innovator in the healthcare
industry, was founded in 1985 to redefine how America cares for the elderly and
is dedicated to helping older adults live a full life as independently as
possible in their later years.
The company, which consolidated its businesses under the brand name
Genesis ElderCare in 1996, has established Genesis ElderCare Networks in five
regional markets in the eastern and mid-western United States and currently
serves more than 175,000 customers daily.
The Cypress Group, based in New York City, manages private equity funds
with more than $3 billion in commitments. Texas Pacific Group, based in San
Francisco and Fort Worth, manages private equity funds in excess of $4 billion.
Certain of the matters discussed in this news release which are not
statements of historical fact are forward looking statements, and because such
statements involve risks and uncertainties, actual results may differ from those
express or implied by such forward looking statements.
Factors that could cause such differences include, but are not limited
to those discussed in Genesis' and Multicare's annual reports on Form 10K for
the year ended September 30, 1998, and their other public filings with the
Securities and Exchange Commission.
2
