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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): March 6, 2000
NORTHSTAR HEALTH SERVICES, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 0-21752 25-1697152
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(State or other jurisdiction (Commission File No.) (IRS Employer
of Incorporation) Identification No.)
665 PHILADELPHIA STREET, INDIANA, PENNSYLVANIA 15701
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (724) 349-7500
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Not Applicable
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(Former name or former address, if changed from last report)
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ITEM 5. OTHER EVENTS
Possible Merger
The registrant has signed a non-binding letter of intent for a possible merger.
The transaction contemplates the purchase of all issued and outstanding common
stock of the Company. The total purchase consideration to be paid would not
exceed $36 million. The purchase consideration would first be used to satisfy
the Company's senior debt obligations with Cerberus Capital Management, L.L.C.,
for itself and as agent for Bear Stearns & Company, subordinated debt
obligations to Thomas W. Zaucha, the Company's Chairman and CEO, and the Zaucha
Family Limited Partnership and certain other liabilities of the Company, upon
such terms and conditions as may be agreed to by the parties. The remaining
consideration would be distributed pro-rata to the shareholders of the Company,
although that amount is not determinable at this time, due to ongoing
negotiations. Mr. Zaucha would continue in an active senior management position
following any implementation of the possible merger and would have the
opportunity to receive supplemental compensation based on the Company's
performance.
The Company has agreed to pay a $1,800,000 termination fee in the event that it
elects to terminate negotiations under the non-binding letter of intent and
enter into and consummate a merger or acquisition with a third party.
The possible merger is subject to due diligence investigation by all parties,
the negotiation and execution of a definitive agreement, which would contain
customary conditions precedent to the closing of the possible merger, and the
procurement of necessary financing. The possible merger would require the
approval of each party's respective Boards of Directors and the approval of the
shareholders of the Company. The Company will retain the services of an
independent financial advisor to provide a fairness opinion related to the
possible merger.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of businesses being acquired: None.
(b) Pro Forma financial information: None.
(c) Exhibits:
(99.1) Press Release, dated March 4, 2000, issued by 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.
Northstar Health Services, Inc.
/s/ Thomas W. Zaucha
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Name: Thomas W. Zaucha
Title: Chairman, CEO, President and Director
(Principal Executive Officer)
/s/ James R. Martin
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Name: James R. Martin
Title: Executive Vice President, Chief Financial
Officer, Treasurer and Director
(Principal Accounting and Financial Officer)
March 6, 2000
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EXHIBIT 99.1
JAMES R. MARTIN, CFO AND TREASURER
NORTHSTAR HEALTH SERVICES, INC.
(724) 349-7500
FOR IMMEDIATE RELEASE
NORTHSTAR HEALTH SERVICES, INC. ANNOUNCES POSSIBLE MERGER
INDIANA, PA - MARCH 4, 2000 - Northstar Health Services, Inc. (OTCBB:NSTR) (the
"Company") announced today that it has signed a non-binding letter of intent
for a possible merger. The transaction contemplates the purchase of all issued
and outstanding common stock of the Company. The total purchase consideration to
be paid would not exceed $36 million. The purchase consideration would first be
used to satisfy the Company's senior debt obligations with Cerberus Capital
Management, L.L.C., for itself and as agent for Bear Stearns & Company,
subordinated debt obligations to Thomas W. Zaucha, the Company's Chairman and
CEO, and the Zaucha Family Limited Partnership and certain other liabilities of
the Company, upon such terms and conditions as may be agreed to by the parties.
The remaining consideration would be distributed pro-rata to the shareholders of
the Company, although that amount is not determinable at this time, due to
ongoing negotiations. Mr. Zaucha would continue in an active senior management
position following any implementation of the possible merger and would have the
opportunity to receive supplemental compensation based on the Company's
performance.
The Company has agreed to pay a $1,800,000 termination fee in the event that it
elects to terminate negotiations under the non-binding letter of intent and
enter into and consummate a merger or acquisition with a third party.
The possible merger is subject to due diligence investigation by all parties,
the negotiation and execution of a definitive agreement, which would contain
customary conditions precedent to the closing of the possible merger, and the
procurement of necessary financing. The possible merger would require the
approval of each party's respective Boards of Directors and the approval of the
shareholders of the Company. The Company will retain the services of an
independent financial advisor to provide a fairness opinion related to the
possible merger.
Northstar Health Services, Inc., is a leading provider of physical therapy
rehabilitation and contracted long term care services at outpatient
rehabilitation clinics and by contract to other healthcare facilities in
Pennsylvania and Ohio.
Forward-looking statements in this release are made pursuant to the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995.
Investors are cautioned that such forward-looking statements involve risks and
uncertainties, including, without limitations, changes in policies regarding
reimbursement, increased levels of competition, competition for qualified
personnel, the outcomes of current litigation involving the Company, and the
ability to have its Common Stock relisted on a national market or exchange and
other risks detailed from time to time in the Company's SEC reports.
