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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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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 13, 1998
CareMatrix Corporation
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(Exact name of registrant as specified in its charter)
Delaware 0-19815 04-3069586
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State or other jurisdiction Commission File Number IRS Employer
of incorporation Identification No.
197 First Avenue
Needham, Massachusetts 02194
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(Address of principal executive offices)
(781) 433-1000
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(Registrant's telephone number,
including area code)
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Item 5. Other Events.
On July 13, 1998, CareMatrix Corporation (the "Company") entered into a
Purchase Agreement (the "Agreement") among Robert Kaplan, Deborah Kaplan-Brooks,
Barton Kaplan and Edward Kaplan (collectively, the "Sellers") and a subsidiary
of the Company. The Agreement provides for the purchase of all of the equity
interests in certain corporations and limited liability companies which own and
operate assisted living facilities on Long Island, New York and in New Jersey.
The acquisition includes an aggregate of ten facilities with a capacity of 2,100
residents, six of which are currently operational, one of which is expected to
begin operation in July and three of which are in the development stage. The
acquisition price consists of approximately $104 million in cash and the
assumption of approximately $40 million in debt. The acquisition is expected to
close in the fourth quarter of 1998. The closing of the acquisition is subject
to customary terms and conditions, including the satisfaction of certain
representations and warranties of the Company and the Sellers.
In addition, the Company has agreed, as conditions to closing under the
Agreement, (i) to provide to the Sellers options to purchase up to an aggregate
of 400,000 shares of common stock of the Company with an exercise price at fair
market value on the closing date of the acquisition; (ii) to enter into an
Operating Agreement with the Sellers for the operation of the facilities by the
Sellers until the earlier of two years or such time as the Company has received
the requisite licenses and approvals to operate the facilities, at an average
annual fee of approximately $1,000,000; and (iii) to enter into an arrangement
whereby the Sellers have the right to put to the Company and the Company has the
right to buy from the Sellers certain pharmacy and home health companies for the
greater of $8 million or eight times net earnings before income taxes for a
specified period prior to closing.
If not sooner consummated, each party has the right to terminate the
Agreement after October 31, 1998.
Included as an exhibit to this Current Report is the text of a press
release issued by the Company on July 14, 1998 concerning the Agreement.
Item 7. Exhibits
Exhibit 99.1 Text of Press Release dated July 14, 1998.
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Signature
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.
CAREMATRIX CORPORATION
By: /s/ Robert M. Kaufman
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Robert M. Kaufman
Chief Executive Officer
Dated: July 17, 1998
Exhibit 99.1
CareMatrix Announces Strategic Acquisition - Adds 10
Facilities With Total Capacity of 2,100 Residents
NEEDHAM, Mass., July 14 -- CareMatrix Corporation (Amex: CMD - news), a fully
integrated assisted living company, today announced that it has reached an
agreement to acquire SeniorCare Group, Ltd., a leading provider of assisted
living services and Alzheimer's care located in Long Island, New York. The
acquisition will add ten facilities with a capacity for 2,100 residents to
CareMatrix's existing 4,500 units in operation or development in the New York
region.
SeniorCare Group, owned by the Robert Kaplan family, currently owns and operates
five premier senior care facilities located in Long Island and one in New
Jersey. A seventh facility will begin operation this month and three others are
in the development stage. Six of the ten facilities will also provide
Alzheimer's care. The value of the transaction is approximately $150 million
including cash and assumption of debt. The transaction is expected to close in
the fourth quarter of 1998.
Robert M. Kaufman, Chief Executive Officer of CareMatrix, commented, "This
strategic acquisition is consistent with our growth strategy of cluster
concentration. It strengthens our position in the New York marketplace, our
largest market, and provides a solid platform for continued growth in this area,
as well as offering significant marketing and operating synergies. Upon
achieving stabilized occupancy for all facilities it is anticipated that the
acquisition will add over $55 million in revenue and over $23 million to
operating cash flow."
Mr. Kaufman added, "We are pleased to be acquiring a company with the
outstanding reputation of SeniorCare. The Kaplans were pioneers in providing
assisted living services in New York and have been operating in this marketplace
for over 25 years. The level of demand at these facilities is strong with
occupancy levels averaging 95%. We are confident that the quality of care and
occupancy will continue as the Kaplans will continue to operate these
communities."
CareMatrix Corporation is a leading provider of senior housing services,
including assisted living, independent, supportive independent living and
specialized programs for people with Alzheimer's disease. With this acquisition,
CareMatrix expects to have an operating capacity for 7,100 and 10,800 residents
at the end of 1998 and 1999, respectively.
This release contains forward-looking statements regarding the Company's future
plans, operations and prospects. The Company's actual results could differ
materially from the results anticipated in these forward looking statements as a
result of uncertainties, including risks relating to demand, pricing,
competition, construction, and other factors identified in the Company's filings
with the Securities and Exchange Commission.
