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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): November 18, 1997
Renal Treatment Centers, Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware 1-14142 23-2518331
(State or Other (Commission File (IRS Employer
Jurisdiction of Number) Identification
Incorporation) Number)
1180 West Swedesford Road, Building 2, Suite 300
Berwyn, PA 19312
(Address of Principal Executive Office)
Registrant's telephone number, including area code: (610) 644-4796
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<PAGE>
Item 5. Other Events
On November 18, 1997, Renal Treatment Centers, Inc.
("RTC") entered into an Agreement and Plan of Merger dated as of
November 18, 1997 (the "Merger Agreement") among RTC, Total Renal
Care Holdings, Inc. ("TRCH") and Nevada Acquisition Corp. ("Newco").
Pursuant to and subject to the terms and conditions of the Merger
Agreement, Newco will be merged with and into RTC, in connection
with which each share of RTC common stock will be converted into
1.335 shares of TRCH common stock (the "Merger"). The Merger will
require the approval of the shareholders of RTC and TRCH and is
subject to other customary closing conditions. The Merger is
expected to be consummated in the first quarter of 1998; however, no
assurance can be given that the consummation of the Merger will
occur on this timetable.
A copy of the press release issued by RTC on November 19,
1997, with respect to the Merger is attached hereto as Exhibit 99.1
and is incorporated herein by reference.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit No. Description
99.1 Press Release dated November 19, 1997
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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.
Renal Treatment Centers, Inc.
By:/s/ Ronald H. Rodgers, Jr.
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Ronald H. Rodgers, Jr.
CFO and Vice President-Finance
November 25, 1997
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EXHIBIT INDEX
Exhibit No. Description of Exhibit
99.1 Press Release dated November 19, 1997
[Exhibit 99.1]
[LOGO]
Total Renal Care, Inc.
PRESS RELEASE
FOR FURTHER INFORMATION PLEASE CONTACT:
AT TOTAL RENAL CARE, INC: AT THE FINANCIAL RELATIONS BOARD:
VICTOR M.G. CHALTIEL, CEO DANIEL SAKS/LARRY DELANEY, GENERAL INFO.
OR JOHN E. KING, CFO MOIRA CONLON, INVESTOR CONTACT
AT (310) 792-2600 AT (310) 442-0599
KATHY BRUNSON, INVESTOR CONTACT
AT RENAL TREATMENT CENTERS, INC.: AT (312) 266-7800
ROBERT L. MAYER, JR., PRESIDENT & CEO
OR RONALD H. RODGERS, JR., CFO
AT 610-644-4796
TOTAL RENAL CARE AND RENAL TREATMENT CENTERS AGREE TO MERGE
TRC To Exchange 1.335 Shares For Each RTC Share In $1.3 Billion
Pooling-Of-Interests Transaction
HIGHLIGHTS INCLUDE:
o Immediately accretive to TRC earnings per share
o Solidifies TRC's position as leading national independent
dialysis provider, with 358 centers, 25,900 patients in 32
states, Washington, D.C., Guam, Puerto Rico, Argentina and
Europe; leading provider in several states, key MSAs and
Argentina
o Provides strong platform to accelerate TRC's aggressive, yet
disciplined, growth strategy both domestically and
internationally
o Combined Q3 annualized net revenues, EBITDA and net income of
approximately $800 million, $200 million and $70 million,
respectively
o Increased critical mass to provide significant cost savings and
synergies
TORRANCE, Calif., Wednesday, November 19, 1997 - Total Renal Care
Holdings, Inc. (NYSE: TRL) and Renal Treatment Centers, Inc. (NYSE:
RXT) today announced that the companies have entered into a definitive
agreement to merge in a stock-for-stock transaction in which TRC will
exchange 1.335 shares for each RTC share in a tax-free exchange.
Based on the closing price of $31.125 per TRC share on November 18,
1997, the transaction values each RTC share at $41.55, which
represents an aggregate value for the RTC shares
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of approximately $1.3 billion. The transaction will be accounted for
as a pooling-of-interests.
The merger, which will approximately double TRC's size, will solidify
the combined company's position as the largest national independent
provider of dialysis services in the U.S. The combined company
currently operates 358 facilities serving approximately 25,900
patients. In addition, the combined company has entered into
definitive agreements or agreements in principle to acquire an
additional 31 centers with approximately 3,700 patients by December
31, 1997. As a result, by the end of 1997 the combined company will
serve 27,800 domestic patients, with leading positions in several
states and key MSAs. Outside the U.S., the combined company will
provide dialysis services to approximately 1,800 additional patients
in Argentina, the United Kingdom and Italy.
"We are excited to be joining forces with TRC," said Robert L. Mayer,
Jr., RTC's president and CEO. "Its quality and outcomes programs,
focused managed-care strategy, extensive renal-related support
programs, and exceptionally strong track record will ensure future
growth."
"We are pleased that Bob Mayer, a pioneer in the dialysis services
industry, will join our Board of Directors and work closely with us to
ensure a successful integration," said Victor M.G. Chaltiel, TRC's
chairman, president and CEO. "Renal Treatment Centers provides a
strong platform for us to accelerate our aggressive, yet disciplined,
growth strategy both in the U.S. and internationally. We will now have
the critical mass necessary to ensure our position as the leading
independent provider of dialysis services in the U.S. and the
resources to rapidly expand into highly fragmented international
markets."
"We have known and respected RTC's team for a long time," Chaltiel
continued. "Their geographic cluster strategy is entirely consistent
with our own approach. In particular, the merger will add strong new
positions in Oklahoma, Colorado and Hawaii, and strengthen our current
market positions in Southern California, Pennsylvania, Eastern Texas,
Georgia and North Carolina."
Chaltiel added: "Following the merger, we will have a stronger
operating and financial base upon which to grow. We have identified
$8.2 million and $22.8 million of annual cost savings and synergies to
be achieved in 1998 and 1999, respectively, and we expect the
transaction to be immediately accretive to earnings."
The merger, which requires approval of both companies' shareholders,
is subject to other customary closing conditions and is expected to be
consummated in the first quarter of 1998.
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Donaldson, Lufkin & Jenrette Securities Corporation is serving as
financial adviser to TRC, and UBS Securities LLC is acting as
financial adviser to RTC.
Selected operating & financial results
($ in millions except net revenue per treatment data)
CURRENT
TRC RTC COMBINED
Centers:
Domestic 188 136 324
International 6 28 34
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Total Current 194 164 358
Agreements (definitive or in principle) 15 16 31
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Total projected year-end 209 180 389
Patients:
Domestic 14,650 9,450 24,100
International 250 1,550 1,800
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Total Current 14,900 11,000 25,900
Agreements (definitive or in principle) 1,500 2,200 3,700
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Total projected year-end 16,400 13,200 29,600
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QUARTER ENDED
SEPTEMBER 30, 1997 ANNUALIZED
TRC RTC COMBINED
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Total Treatments 1,959,692 1,616,580 3,576,272
Net Revenues $454.7 $346.2 $800.9
EBITDA 112.6 90.1 202.6
Net Income 39.5 30.6 70.1
Net Revenues per Treatment $232.01 $214.18 $223.95
EBITDA Margin 24.8% 26.0% 25.3%
Renal Treatment Centers, Inc. provides dialysis treatments and
ancillary services to patients suffering from chronic kidney failure,
primarily in free-standing outpatient dialysis treatment centers or in
the patient's home. RTC operates a total of 164 dialysis centers in 23
states, Washington, D.C. and the Republic of Argentina. In these
centers, RTC provides dialysis services for approximately 11,000
patients. RTC also provides in-patient dialysis services to more than
125 hospitals.
Total Renal Care Holdings, Inc. owns and operates 194 free-standing
kidney dialysis centers and home peritoneal dialysis programs in 18
states as well as Washington, D.C., Puerto Rico, Guam and Europe,
serving approximately 14,900 patients. TRC also provides acute
hemodialysis services to in-patients at 119 hospitals. The company
operates ESRD laboratory and pharmacy facilities as well as vascular
access management, transplant services and ESRD clinical research
programs.
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For information on Total Renal Care Holdings, Inc., via facsimile at
no cost, dial 1-800-PRO-INFO and dial company code TRL.
(The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. The information contained in
this release, other than historical data, contains statements that are
forward-looking, such as references to the future performance of the
combined company, growth opportunities, combined operation cost
savings and synergies, the company's dependence on Medicare, Medicaid
and other sources of reimbursement, government regulations,
competition and dependence on physician referrals. Forward-looking
information involves important risks and uncertainties that could
significantly affect anticipated results. Accordingly, such results
may differ from those expressed in forward-looking statements made by
or on behalf of the company. For more information on the potential
factors that could affect the company's financial results, review the
company's filings with the Securities and Exchange Commission,
including the company's annual report on Form 10-K and the company's
other filings with the SEC.)
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