As filed with the Securities and Exchange Commission on January 31, 1997
Registration No. 333-3314
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
POST-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
MARINER HEALTH GROUP, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 04-2272148
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
125 EUGENE O'NEILL DRIVE
NEW LONDON, CONNECTICUT 06320
(860) 701-2000
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
---------------------
ARTHUR W. STRATTON, JR., M.D.
125 EUGENE O'NEILL DRIVE
NEW LONDON, CONNECTICUT 06320
(860) 701-2000
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
Copy to:
MARK H. BURNETT, ESQ.
TESTA, HURWITZ & THIBEAULT, LLP
HIGH STREET TOWER
125 HIGH STREET
BOSTON, MASSACHUSETTS 02110
(617) 248-7000
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Approximate date of commencement of proposed sale to
the public: From time to time after this registration
statement becomes effective.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being offered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(b)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
=============================
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
2
SUBJECT TO COMPLETION, DATED JANUARY 31, 1997
MARINER HEALTH GROUP, INC.
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1,029,255 Shares
Common Stock
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This Prospectus relates to the resale of up to an aggregate of 1,029,255
shares of Common Stock, par value $.01 per share (the "Shares"), of Mariner
Health Group, Inc. ("Mariner" or the "Company") issued to the stockholders of
MedRehab, Inc. ("MedRehab") in connection with the Company's acquisition of
MedRehab. See "SELLING STOCKHOLDERS." The Selling Stockholders may sell the
Shares at market prices prevailing at the time of the sale or at prices
otherwise negotiated. The Shares are to be sold in the over-the-counter market,
in ordinary brokers' transactions or otherwise through ________________________
at any time through the date that is at least 90 days from the date of this
Prospectus. See "PLAN OF DISTRIBUTION." The Selling Stockholders, and certain
persons who purchase shares from them including broker-dealers acting as
principals who may resell the Shares, may be deemed "underwriters," as that term
is defined in the Securities Act of 1933 (the "Securities Act"). See "PLAN OF
DISTRIBUTION."
None of the proceeds from the resale of the Shares will be received by the
Company. The Company is responsible for the expenses incurred in connection with
the registration of the Shares. The Selling Stockholders will pay or assume
brokerage commissions or other similar charges incurred in the sale of the
Shares. The Company has agreed to indemnify the Selling Stockholders against
certain liabilities, including liabilities under the Securities Act.
Mariner's Common Stock is listed on The Nasdaq National Market under the
symbol "MRNR." The last reported sale price for the Common Stock on January
30, 1997 was $9-5/8, as reported by The Nasdaq National Market.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
AN INVESTMENT IN THESE SECURITIES INVOLVES CERTAIN RISKS. SEE "RISK
FACTORS" APPEARING ON PAGE 5.
The date of this Prospectus is ________ ____, 1997.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
3
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act"), and in accordance therewith files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information are available for inspection and copying at the public reference
facilities maintained by the Commission at 450 5th Street, N.W., Washington,
D.C. 20549, and at the following regional offices of the Commission: Seven World
Trade Center, 13th Floor, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can
also be obtained from the Public Reference Section of the Commission at 450 5th
Street, N.W., Washington, D.C. 20549 at prescribed rates. The Common Stock of
the Company is quoted on The Nasdaq National Market and such material may also
be inspected and copied at the offices of the National Association of Security
Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006. The Commission also
maintains a Web site on the Internet that contains reports, proxy and
information statements and other information regarding the Company. The address
of such Web site is http://www.sec.gov.
The Company has filed with the Commission a Registration Statement on Form
S-3 (including all amendments thereto, the "Registration Statement") under the
Securities Act, with respect to the Common Stock offered hereby. This Prospectus
does not contain all information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information regarding the Company and the Common
Stock offered hereby, reference is hereby made to the Registration Statement and
to the exhibits and schedules filed therewith. Statements contained in this
Prospectus regarding the contents of any agreement or other document filed as an
exhibit to the Registration Statement are not necessarily complete, and in each
instance reference is made to the copy of such agreement filed as an exhibit to
the Registration Statement, each such statement being qualified in all respects
by such reference. The Registration Statement, including the exhibits and
schedules thereto, may be inspected at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549 and copies of all or any part thereof may be obtained from such
office upon payment of the prescribed fees. Such material may also be accessed
electronically by means of the Commission's Web site at http://www.sec.gov.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission pursuant
to the Exchange Act are incorporated in this Prospectus by reference as of their
respective dates (File No. 0-21512): (1) Annual Report on Form 10-K for the
fiscal year ended December 31, 1995 (as amended on April 9, 1996 and May 14,
1996); (2) Current Reports on Form 8-K dated January 2, 1996, April 1, 1996,
April 4, 1996, April 30, 1996, June 13, 1996, July 31, 1996 and October 3, 1996;
(3) Forms 10-C filed with the Commission on January 5, 1996 and March 6, 1996;
(4) Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 1996,
June 30, 1996 and September 30, 1996; and (5) the sections entitled "Description
of Securities to be Registered" contained in the Company's Registration
Statements on Form 8-A filed with the Commission on April 9, 1993, as amended,
and November 1, 1995.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act, prior to the termination of the offering
made hereby, shall be deemed to be incorporated by reference in this Prospectus
from the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which is
also deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a Prospectus
is delivered, on the written or oral request of such person, a copy of any or
all of the documents described above (other than exhibits to such documents).
Requests for such copies should be directed to David N. Hansen, Chief Financial
Officer, Mariner Health Group, Inc., 125 Eugene O'Neill Drive, New London,
Connecticut 06320, telephone (860) 701-2000.
4
Unless the context otherwise requires references in the Prospectus to the
"Company" or "Mariner" refer to Mariner Health Group, Inc. and its subsidiaries.
TRADEMARKS
MarinerCare(R) is a registered service mark of the Company.
THE COMPANY
Mariner is a leading provider of outcomes-oriented, post-acute health care
services in selected markets, with a particular clinical expertise in the
treatment of short-stay subacute patients in cost-effective alternate sites. The
Company's services and products include inpatient care, comprehensive inpatient
and outpatient rehabilitations services, medical services and products
(including institutional and home pharmacy services, respiratory and infusion
therapy and durable medical equipment), home care and physician services. By
providing this continuum of care in selected markets, the Company believes that
it will be better able to maintain quality of care and control costs while
coordinating the treatment of patients from the onset of illness to recovery.
The Company seeks to cluster facilities and other post-acute health care
services around large metropolitan areas and major medical centers.
The Company's principal executive offices are located at 125 Eugene O'Neill
Drive, New London, Connecticut 06320, and its telephone number at such address
is (860) 701-2000.
RECENT DEVELOPMENTS
Recent Acquisitions
In the fourth quarter of 1996, Mariner consummated its acquisition of
certain assets of Allegis Health Services, Inc. (the "Allegis Acquisition") and
certain of its affiliates. Under the terms of the acquisition agreement, the
Company purchased eight free-standing facilities, an institutional pharmacy and
infusion therapy subsidiary, and a rehabilitation program management services
subsidiary. These facilities, with an aggregate of 1,457 beds, are located
throughout the Baltimore - Washington Metropolitan area. The aggregate purchase
price paid by the Company for the assets, voting securities and limited
liability company interests was approximately $109,856,000, of which
approximately $97,500,000 was paid by the Company in cash and approximately
$12,356,000 represents indebtedness assumed by the Company in connection with
the Allegis Acquisition. The transaction was accounted for as a purchase.
RISK FACTORS
In addition to the other information contained in this Prospectus, the
following factors should be carefully considered by prospective investors when
evaluating an investment in the Company's securities.
DEPENDENCE ON REIMBURSEMENT BY THIRD-PARTY PAYORS
Mariner derives a significant portion of its revenue from the Medicaid
and Medicare programs. In the years ended December 31, 1993, 1994 and 1995, and
the nine months ended September 30, 1996 the Company derived 26%, 23%, 24%, and
22% respectively, of its revenue from Medicaid programs and 29%, 30%, 33%, and
36% respectively, of its revenues from the Medicare program. These programs are
subject to retroactive rate adjustments, administrative rulings and government
funding restrictions, all of which may decrease the level of program
reimbursements to the Company. Funds received by the Company from the Medicare
and Medicaid programs are
5
subject to audit which can result in the Company having to refund overpayments.
In addition, there can be no assurance that facilities owned, leased or managed
by Mariner now or in the future that participate in the Medicare and Medicaid
programs will initially meet or continue to meet the requirements for
participation in the Medicare and Medicaid programs. Legislation and regulations
have been proposed on the federal and state levels that would have the effect of
materially limiting or reducing reimbursement levels for the Company's programs
and services. Mariner cannot predict whether any of these proposals will be
adopted or, if adopted, the effect (if any) such proposals will have on the
Company. Furthermore the Company has observed a nationwide change in the
practices of its Medicare Fiscal Intermediaries which, on behalf of the Health
Care Finance Administration ("HCFA"), the federal agency responsible for
administering the Medicare program, have begun to aggressively and
retrospectively change their position on previously approved costs. This change
includes the reclassification of costs from reimbursable to non-reimbursable and
the challenging of payment for costs which had traditionally been approved. In
response to these challenges of the payment of Medicare costs on an
industry-wide basis, the Company has provided additional reserve amounts for
potential lower levels of Medicare reimbursement.
In April 1995, HCFA issued a memorandum to its Medicare fiscal
intermediaries as a guideline to assess costs incurred by inpatient providers
relating to payment of occupational and speech language pathology services
furnished under arrangements that include contracts between therapy providers
and inpatient providers. While not binding on the fiscal intermediaries, the
memorandum suggested certain rates to assist the fiscal intermediaries in making
annual "prudent buyer" assessments of speech and occupational therapy rates paid
by inpatient providers. In addition, HCFA through its intermediaries is
subjecting physical therapy, occupational therapy and speech therapy to a
heightened level of scrutiny resulting in increased audit activity. A majority
of Mariner's provider and rehabilitation contracts provide for indemnification
of the facilities for potential liabilities in connection with rehabilitation
services. In light of the uncertainty regarding health care reform, Mariner
cannot now determine whether HCFA will continue to recommend the rates suggested
in the memorandum or whether such rates will be used by HCFA as a basis for
developing a salary equivalency based reimbursement system for speech and
occupational therapy services. The Company's gross margins for its physical
therapy services under Medicare's salary equivalency guidelines are
significantly less than for its speech and occupational therapy services which
are currently reimbursed by Medicare under the prudent buyer standard. There can
be no assurance that actions ultimately taken by HCFA with regard to
reimbursement rates for such therapy services will not materially adversely
affect the Company's results of operations.
In addition to reducing revenue from federal and state payors, the
imposition of more stringent reimbursement guidelines or a decrease in the level
of Medicare or Medicaid reimbursement for these services could adversely affect
the ability of skilled nursing facilities or other health care providers that
depend on Medicare or Medicaid reimbursement to pay the Company for
rehabilitation program services and may cause such facilities to reduce the
rates that they are willing to pay the Company for such services. Any
significant decrease in Medicare or Medicaid reimbursement levels, or the
imposition of significant restrictions on participation in Medicare or Medicaid
programs, could have a material adverse effect on the Company. Certain states in
which Mariner operates have undertaken a study of acuity levels and are
considering changes in their reimbursement systems to take levels of acuity into
account. Accordingly, there can be no assurance that the rates paid to Mariner
by Medicare, Medicaid, private payors or by skilled nursing facilities under
rehabilitation programs will continue to be adequate to reimburse the Company
for the costs of providing services to covered beneficiaries. Mariner has also
agreed under certain of its contracts with private payors (and intends to
continue to agree as part of its business strategy) to provide certain health
care services to covered patients on a case rate or capitated basis.
HEALTH CARE REFORM
Current political, economic and regulatory influences are likely to
lead to fundamental changes in the health care industry in the United States.
Numerous proposals for comprehensive reform of the nation's health care system
have been introduced over the past few years in Congress. Many potential
approaches are under consideration, including controls on health care spending
through limitations on the growth of private health insurance premiums and
Medicare and Medicaid spending and other fundamental changes to the health care
delivery system. In addition, some of the states in which the Company operates
are considering or have adopted various health care reform proposals and are
considering reductions in their state Medicaid budgets. Mariner anticipates that
Congress and state legislatures will continue to review and assess alternative
health care delivery systems and payment methodologies and that public debate of
these issues will likely continue in the future. Due to
6
uncertainties regarding the ultimate features of reform initiatives and their
enactment and implementation, the Company cannot predict which, if any, of such
reform proposals will be adopted, when they may be adopted or what impact they
may have on the Company. In addition, the cost and service considerations which
have generated proposals for health care reform have also resulted in, and are
expected to continue to result in, strategic realignments and combinations in
the health care industry which may, over time, have a significant impact on the
Company's strategic direction and operating results. There can be no assurance
that future legislation, health care or budgetary, or other changes in the
administration or interpretation of governmental health care programs will not
materially adversely affect the results of operations of Mariner. Concern about
the potential effects of the proposed reform measures have contributed to the
volatility of prices in securities of companies in health care and related
industries, including the Company, and may similarly affect the price of the
Company's Common Stock in the future.
In November 1995, Congress passed the 1995 Balanced Budget Act
providing for, among other things, the reshaping of the Medicare and Medicaid
programs and a proposal to provide funds in the form of block grants to the
states to administer the Medicaid program and certain other existing programs
for the elderly. In December 1995, President Clinton vetoed the 1995 Balanced
Budget Act and proposed alternative Medicare and Medicaid legislation. Each of
the legislative proposals offered by the President and Congress provides for
significant reductions in the overall rate of Medicare and Medicaid spending
growth. In addition to the foregoing, the National Governors Association has
issued a proposal which would allow states the option to reduce or eliminate
benefits to the "medically needy" and other changes to the Medicaid system.
There is active discussion concerning the foregoing and the balancing of the
federal and state budgets, and the form of any final legislation signed into law
could differ significantly from current proposals.
Aspects of certain of the health care proposals, such as reductions in
funding of the Medicare and Medicaid programs, potential changes in
reimbursement regulations by HCFA for contract therapy services, containment of
health care costs, proposals to reimburse health care providers on a basis not
linked to costs on an interim basis that could include a short-term freeze on
prices charged by health care providers and greater state flexibility in the
administration of Medicaid, could materially adversely affect the Company.
UNCERTAINTY OF REGULATION
The Company and the health care industry generally are subject to
extensive federal, state and local regulation governing licensure and conduct of
operations at existing facilities, construction of new facilities, acquisition
of existing facilities, addition of new services, certain capital expenditures,
reimbursement for services rendered and disposal of medical waste. Changes in
applicable laws and regulations or new interpretations of existing laws and
regulations could have a material adverse effect on licensure, eligibility for
participation, permissible activities, operating costs and the levels of
reimbursement from governmental and other sources. There can be no assurance
that regulatory authorities will not adopt changes or new interpretations of
existing regulations that could adversely affect the Company. The failure to
maintain or renew any required regulatory approvals or licenses could prevent
the Company from offering existing services or from obtaining reimbursement. In
certain circumstances, failure to comply at one facility may affect the ability
of the Company to obtain or maintain licenses or approvals under Medicare and
Medicaid programs at other facilities.
Recently effective provisions of the regulations adopted under the
Omnibus Budget Reconciliation Act of 1987, as amended ("OBRA") have expanded
remedies available to HCFA to enforce compliance with the detailed regulations
mandating minimum health care standards and may significantly affect the
consequences to the Company if annual or other HCFA facility surveys identify
noncompliance with these regulations. Remedies include fines, monetary
penalties, new patient admission moratoriums, denial of reimbursement, federal
or state monitoring of operations, closure of facilities and termination of
provider reimbursement agreements. In the ordinary course of its business, the
Company receives notices from time to time of deficiencies for failure to comply
with various regulatory requirements. Although the Company reviews such notices
and takes appropriate corrective action, there can be no assurance that the
Company's facilities will be able to remedy the deficiencies in all situations
or remain continuously in compliance with regulatory requirements. Adverse
actions against a facility by applicable regulatory agencies may adversely
affect the facility's ability to continue to operate, the ability of the Company
to provide certain services, and the facility's eligibility to participate in
the Medicare or Medicaid programs. These actions may adversely affect the
Company's business and results of operations.
7
The Company is also subject to federal and state laws which govern
financial and other arrangements between health care providers. These laws often
prohibit certain direct and indirect payments or fee-splitting arrangements
between health care providers that are designed to induce or encourage the
referral of patients to, or the recommendation of, a particular provider for
medical products and services. These laws include the federal "Stark
legislations" which prohibit, with limited exceptions, physician ownership of
ancillary service providers and payments for physician referrals and the federal
"anti-kickback law" which prohibits, among other things, the offer, payment,
solicitation, or receipt of any form of remuneration in return for the referral
of Medicare and Medicaid patients. The Office of the Inspector General of the
Department of Health and Human Services, the Department of Justice and other
federal agencies interpret these fraud and abuse provisions liberally and
enforce them aggressively. Members of the House and Senate have proposed
legislation that would significantly expand the federal government's involvement
in curtailing fraud and abuse and increase the monetary penalties for violation
of these provisions. In addition, some states restrict certain business
relationships between physicians and other providers of health care services.
Many states prohibit business corporations from providing, or holding themselves
out as a provider of, medical care. Possible sanctions for violation of any of
these restrictions or prohibitions include loss of licensure or eligibility to
participate in reimbursement programs (including Medicare and Medicaid), asset
forfeitures and civil and criminal penalties (including monetary penalties).
These laws vary from state to state, are often vague and have seldom been
interpreted by the courts or regulatory agencies. From time to time, the Company
has sought guidance as to the interpretation of these laws; however, there can
be no assurance that such laws will ultimately be interpreted in a manner
consistent with the practices of the Company.
Many states have adopted certificate of need or similar laws which
generally require that the appropriate state agency approve certain acquisitions
or capital expenditures in excess of defined levels and determine that a need
exists for certain new bed additions, new services, and the acquisition of such
medical equipment or capital expenditures or other changes prior to beds and/or
services being added. Many states have placed a moratorium on granting
additional certificates of need or otherwise stated their intent not to grant
approval for new beds. To the extent certificates of need or other similar
approvals are required for expansion of Company operations, either through
facility acquisitions or expansion or provision of new services or other
changes, such expansion could be adversely affected by the failure or inability
to obtain the necessary approvals, changes in the standards applicable to such
approvals and possible delays the expenses associated with obtaining such
approvals.
The Company's pharmacy business is also subject to inspection by state
and federal agencies regarding record keeping, inventory control and other
aspects of the pharmacy business.
The Company is unable to predict the future course of federal, state
and local regulation or legislation, including Medicare and Medicaid statutes
and regulations. Further changes in the regulatory framework could have a
material adverse effect on the financial results of the Company's operations.
DIFFICULTY OF INTEGRATING RECENT ACQUISITIONS
The successful integration of the businesses Mariner acquires is
important to the Company's future performance. The anticipated benefits from any
of these acquisitions may not be achieved unless the operations of the acquired
businesses are successfully combined with those of the Company in a timely
manner. The integration of the Company's recent acquisitions will require
substantial attention from management. The diversion of the attention of
management, and any difficulties encountered in the transition process, could
have a material adverse effect on Mariner's revenue and operating results. In
addition, the process of integrating the various businesses could cause the
interruption of, or a loss of momentum in, the activities of some or all of
these businesses, which could have a material adverse effect on the Company's
operations and financial results. There can be no assurance that Mariner will
realize any of the anticipated benefits from these acquisitions.
EXPANSION RISKS AND IMPACT ON FUTURE OPERATING RESULTS
Mariner's strategy includes expanding by establishing or acquiring
additional freestanding subacute care facilities, managing subacute care units
within general acute care hospitals and acquiring ancillary health care services
businesses. As part of its strategy, the Company may acquire businesses that
operate one or more freestanding inpatient facilities or rehabilitation,
pharmacy, home care, medical equipment and other health care businesses. There
is significant competition for acquisition and expansion opportunities in the
Company's businesses. As this competition intensifies due to ongoing
consolidation in the health care industry, the costs of
8
capitalizing on such opportunities may increase. Mariner competes for
acquisition and expansion opportunities with companies that have significantly
greater financial and management resources. There can be no assurance that the
Company will be able to compete successfully for these opportunities, operate
the acquired businesses profitably or otherwise implement successfully its
expansion strategy. Mariner's expansion will depend on its ability to create
demand in new markets for its clinical programs and to staff new facilities and
rehabilitation programs, as well as on the availability of facilities and
businesses for acquisition or management. Such expansion and growth place
significant demands on the Company's financial and management resources. If
Mariner is unable to manage its growth effectively, the quality of its services,
its ability to recruit and retain key personnel and its results of operations
could be materially and adversely affected.
An acquired facility may contain an existing patient population and,
consequently, a significant length of time may be required before such patient
population changes sufficiently to require a level of care, and to have a length
of stay, comparable to that provided in the Company's existing facilities.
During this conversion period, Mariner would generally expect to realize lower
reimbursement rates for these existing patients than could otherwise be obtained
for new patients. If the Company acquires a business that operates multiple
facilities, the time required to convert the acquired facilities may be longer
than that required to convert individual facilities. As a result, the expected
lower reimbursement rates could persist for a longer period, having a material
adverse effect on the Company's operating results. Further, the effort required
to make such newly acquired facilities more comparable to the Company's existing
facilities may place significant demands on Mariner's financial and management
resources.
The Company may also open new freestanding inpatient facilities, which
typically have low initial occupancy rates. Because newly opened facilities
require a basic complement of staff on the day the facility opens regardless of
the patient census, these facilities initially generate significant operating
losses.
As a result of these factors, as well as expansion into new markets and
the addition of ancillary services, Mariner could experience significant
fluctuations in operating results.
LEVERAGE
As of September 30, 1996, the Company had approximately $303 million of
outstanding indebtedness, which represented 49% of its total capitalization
(including current maturities). As of such date, the Company had $226 million of
availability under its existing senior secured revolving credit facility (the
"Credit Facility"). Subsequent to September 30, 1996, the Company borrowed
approximately $97,500,000 to fund the cash portion of the purchase price paid by
the Company in the Allegis Acquisition. On July 1, 1996, the Company entered
into an amendment to the Credit Facility, which amendment increased the
Company's borrowing capacity from $200,000,000 to $250,000,000 and made certain
other changes. Although the Company's cash flow from operations has been
sufficient to meet its debt service obligations in the past, there can be no
assurance that the Company's operating results will continue to be sufficient
for the Company to meet its obligations. The Company's ability to comply with
the terms of its outstanding 9-1/2% Senior Subordinated Notes due 2006 (the
"Notes") and the Credit Facility, to make cash payments with respect to the
Notes and under the Credit Facility and to satisfy its other debt or to
refinance any of such obligations will depend on the future performance of the
Company, which in turn, is subject to prevailing economic conditions and
financial and other factors beyond its control.
The degree to which the Company is leveraged could have important
consequences to the holders of the Company's securities, including the
following: (i) the Company's ability to obtain additional financing for
acquisitions, capital expenditures, working capital or general corporate
purposes may be impaired in the future; (ii) a substantial portion of the
Company's cash flow from operations must be dedicated to the payment of
principal and interest on the Notes and borrowings under the Credit Facility and
other indebtedness, thereby reducing the funds available to the Company for its
operations and other purposes; (iii) certain of the Company's borrowings are and
will continue to be at variable rates of interest, which exposes the Company to
the risk of increased interest rates; and (iv) the Company may be substantially
more leveraged than certain of its competitors, which may place the Company at a
relative competitive disadvantage and make the Company more vulnerable to
changing market conditions and regulations.
RESTRICTIONS IMPOSED BY INDEBTEDNESS
The Credit Facility contains a number of covenants that, among other
things, restrict the ability of the Company to incur additional indebtedness,
pay dividends, prepay subordinated indebtedness, dispose of certain
9
assets, enter into sale and leaseback transactions, create liens, make capital
expenditures and make certain investments or acquisitions and otherwise restrict
corporate activities. In addition, under the Credit Facility, the Company is
required to satisfy specified financial covenants, including total indebtedness
to cash flow, senior indebtedness to cash flow, fixed charge coverage ratio, and
minimum net worth tests. The ability of the Company to comply with such
provisions may be affected by events beyond the Company's control. The breach of
any of these covenants could result in a default under the Credit Facility. In
the event of any such default, the lenders under the Credit Facility (the
"Banks") could elect to declare all amounts borrowed under the Credit Facility,
together with accrued interest, to be due and payable. The Credit Facility is
secured by the capital stock of the Company's subsidiaries and certain other
assets of the Company's subsidiaries, and if the Company were unable to repay
borrowings under the Credit Facility, the Banks could proceed against their
collateral. The Notes subject the Company to certain restrictive covenants,
including, among other things, covenants with respect to the following matters:
(i) limitation on indebtedness; (ii) limitation on restricted payments; (iii)
limitation on the incurrence of liens; (iv) restriction on the issuance of
preferred stock of subsidiaries; (v) limitation on transactions with affiliates;
(vi) limitation on sale of assets; (vii) limitation on other senior subordinated
indebtedness; (viii) limitation on guarantees by subsidiaries; (ix) limitation
on the creation of any restriction on the ability of the Company's subsidiaries
to make distributions; and (x) restriction on mergers, consolidations and the
transfer of all or substantially all of the assets of the Company to another
person. In addition, the loan instruments governing the indebtedness of certain
of the Company's subsidiaries contain certain restrictive covenants which limit
the payment of dividends and distributions, and the transfer of assets, by such
subsidiary to the Company and require such subsidiaries to satisfy specific
financial covenants.
DEPENDENCE ON KEY PERSONNEL; DEMAND FOR PERSONNEL
Mariner believes that it has benefited substantially from the
leadership and experience of its executive officers and members of its
management team. If such executive officers were to leave the Company, the
Company's business and results of operations could be materially adversely
affected. Further, the Company's growth strategy is dependent in large part on
its ability to attract and retain management, marketing and other personnel at
its facilities. From time to time, there have been shortages in the supply of
available registered nurses and various types of therapists. Mariner's ability
to provide rehabilitation services is dependent on its ability to recruit and
retain licensed therapists. The Company competes with general acute care
hospitals, skilled nursing facilities, rehabilitation hospitals, contract
rehabilitation companies and other health care providers for the services of
physicians, registered nurses, therapists and other professional personnel.
There can be no assurance that the Company will be able to attract and retain
the qualified personnel necessary for its business and planned growth. The loss
of a significant number of members of this management team, or the failure to
attract or retain the qualified personnel necessary for its business and planned
growth, could have a material adverse effect on the Company's business and
results of operations.
COMPETITION
The health care industry is highly competitive. Mariner competes with
general acute care hospitals, skilled nursing facilities, rehabilitation
hospitals, contract rehabilitation companies and other health care providers.
Many of the Company's competitors have underutilized facilities and are
expanding into subacute care by converting some of their facilities into
subacute units. In particular, a number of nursing care facilities and acute
care hospitals are adding subacute units. The Company's facilities generally
operate in communities that are also served by competing facilities, some of
which may be newer or offer more programs. Many of these competitors have
significantly greater resources than the Company and are affiliated with
institutions or chains that are larger and have greater access to capital than
the Company or operate on a non-profit or charitable basis. Cost containment
efforts, which encourage more efficient utilization of hospital services, have
resulted in decreased hospital occupancy in recent years. These cost containment
efforts, as well as the prospect of health care reform, have also caused many
health care providers to combine with other health care providers to achieve
greater efficiencies and to reduce costs. The Company expects this trend, which
may increase competition in its markets, to continue.
DEPENDENCE ON CONTRACT RENEWALS
The Company provides rehabilitation program services pursuant to
contracts with skilled nursing facilities and other parties. These contracts are
generally for terms of one year and cancellable on 30 to 90 days' notice by
either party. Although the number of rehabilitation contracts with skilled
nursing facilities has increased from 208 as
10
of December 31, 1993 to 429 as of September 30, 1996, each year a number of
contracts have been canceled or not renewed by the Company's clients. In March
1996, the Company completed the MedRehab Merger, which added physical medicine
and rehabilitation services contracts for approximately 227 sites (including 149
skilled nursing facilities). The decision by a significant number of Mariner's
skilled nursing facility clients to cancel or not renew these contracts could
have a material adverse effect on the Company's results of operations.
POTENTIAL VOLATILITY OF STOCK PRICE
There has been significant volatility in the market prices of
securities of health care companies, including Mariner. Mariner believes factors
such as legislative and regulatory developments and quarterly variations in
financial results could cause the market price of the Company's Common Stock to
fluctuate substantially. In addition, the stock market has experienced
volatility that has particularly affected the market prices of many health care
service companies' stocks and that often has been unrelated to the operating
performance of such companies. These market fluctuations may adversely affect
the price of the Company's Common Stock.
CONTROL BY SIGNIFICANT STOCKHOLDERS
As of January 30, 1997 and based on their most recent filings with the
Commission on Schedule 13D, one stockholder group (the former owners of CSI)
reported beneficial ownership of 20.8% of the Company's Common Stock. As a
result of such holding and one seat on the board of directors, this stockholder
group may have the ability to exert significant influence over the outcome of
all matters submitted to the Company's stockholders for approval, including the
election of directors.
ANTI-TAKEOVER PROVISIONS; STOCKHOLDER RIGHTS PLAN; POSSIBLE ISSUANCE OF
PREFERRED STOCK
The Company's Stockholders Rights Plan and certain provisions of the
Company's certificate of incorporation and by-laws may make it more difficult
for a third party to acquire, or discourage acquisition bids for, the Company.
In addition, if a change of control (as defined under the terms of the indenture
(the "Indenture") governing the Notes) shall occur then each holder of Notes
shall have the right to require that the Company purchase such holder's Notes in
whole or in part in integral multiples of $1,000 at a purchase price in cash in
an amount equal to 101% of the principal amount of such Notes, plus accrued and
unpaid interest, if any, to the date of purchase. In addition to the obligations
of the Company under the indenture with respect to the Notes in the event of a
change of control the Credit Facility also contains an event of default upon a
"change of control" as defined therein which obligates the Company to repay
amounts outstanding under the Credit Facility upon an acceleration of the
indebtedness issued thereunder. These provisions could limit the price that
certain investors might be willing to pay in the future for shares of the
Company's Common Stock. In addition, shares of Mariner's preferred stock may be
issued in the future without further stockholder approval and upon such terms
and conditions, having such rights, privileges and preferences, as the Board of
Directors may determine. The rights of the holders of the Company's Common Stock
will be subject to, and may be adversely affected by, the rights of any holders
of preferred stock that may be issued in the future. Mariner has no present
plans to issue any shares of preferred stock. The Company may also issue
additional shares of its Common Stock in the future without further stockholder
approval. The issuance of preferred stock or additional shares of the Company's
Common Stock, while providing desirable flexibility in connection with possible
acquisitions and other corporate purposes, could have the effect of making it
more difficult for a third party to acquire, or discouraging a third party from
acquiring, a majority of the outstanding voting stock of the Company.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Stockholders.
11
SELLING STOCKHOLDERS
The following table sets forth certain information regarding beneficial
ownership of the Shares as of January 31, 1997 and the number of Shares which
may be offered for the account of the Selling Stockholders or their transferees
or distributees from time to time. See "Plan of Distribution."
<TABLE>
<CAPTION>
Shares Shares Shares
Beneficially To Be Sold Beneficially
Owned Prior In The Owned After
Selling Stockholder To Offering Offering(1)<F1> The Offering (1)<F1>
------------------- ----------- ----------- ----------------
<S> <C> <C> <C>
Allstate Insurance Company 649,765 649,765 --
Allstate Life Insurance Company 324,852 324,852 --
Foster & Foster 12,918 12,918 --
Merifin Capital N.V. 12,861 12,861 --
George H. Hargrave 4,037 4,037 --
Robert J. Lawrence 807 807 --
Robert G. Rush 3,229 3,229 --
Ronald Dodson 2,422 2,422 --
Richard Tinsley 403 403 --
Brian K. Strong 258 258 --
Gary W. Johnson 129 129 --
Alma D. Peters 129 129 --
Robert Schmidt 96 96 --
Frank Perkins 90 90 --
Ronald S. Northup 64 64 --
Barbara A. Chesser 19 19 --
LINC Capital Management, a division of
Scientific Leasing, Inc. 5,327 5,327 --
Miroslav Anic 393 393 --
The Bank of New York 10,329 10,329 --
CoreStates, N.A. 1,127 1,127 --
- ---------
<FN>
<F1>
(1) Share numbers are estimated, as the Selling Stockholders or their
transferees or distributees may sell all or any part of the Shares
pursuant to the offering.
</FN>
</TABLE>
12
PLAN OF DISTRIBUTION
The Shares offered hereby may be sold from time to time by the Selling
Stockholders acting as principals for their own account through _______________.
The Company is responsible for the expenses incurred in connection with the
registration of the Shares. The Selling Stockholders will pay or assume
brokerage commissions or other charges and expenses incurred in the sale of the
Shares. In addition, Mariner has agreed to indemnify the Selling Stockholders
against certain liabilities, including liabilities under the Securities Act,
and, in the event that any offering is made by the Selling Stockholders through
underwriters, to agree to indemnify such underwriters for such liabilities.
The distribution of the Shares by the Selling Stockholders is not currently
subject to any underwriting agreement. The Shares covered by this Prospectus may
be sold by the Selling Stockholders or by pledgees, donees, transferees, or
other successors in interest from time to time. Such sales may be made at fixed
prices that may be changed, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices, or at negotiated prices. Such
sales may be effected in the over-the-counter market, on the National
Association of Securities Dealers Automated Quotation System, on the Nasdaq
National Market, or on any exchange on which the Shares may then be listed. The
Shares may be sold by one or more of the following: (a) one or more block trades
in which a broker or dealer so engaged will attempt to sell all or a portion of
the Shares held by the Selling Stockholders as agent but may position and resell
a portion of the block as principal to facilitate the transaction; (b) purchases
by a broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus; and (c) ordinary brokerage transactions and
transactions in which the broker solicits purchasers. The Selling Stockholders
are required to effect such transactions by selling Shares to or through
_____________________________, and such broker-dealer may receive compensation
in negotiated amounts in the form of discounts, concessions, commissions or fees
from the Selling Stockholders and/or the purchasers of the Shares for whom such
broker-dealer may act as agent or to whom it may sell as principal, or both
(which compensation might be in excess of customary commissions).
_________________________________ and the Selling Stockholders may be deemed to
be "underwriters" within the meaning of the Securities Act in connection with
such sales, and any commissions received by such broker-dealers may be deemed to
be underwriting compensation. The Company has agreed to use all reasonable
efforts to maintain the effectiveness of the Registration Statement until at
least 90 days from the date of this Prospectus. The Selling Stockholders have
agreed to suspend its offering of the Shares hereunder for a period not exceed
20 days upon notification by Mariner of certain potential material events. In
such event, the effectiveness of the Registration Statement shall be extended by
Mariner for a period of time equivelent to the period of any such suspension.
Mariner may not exercise its right to suspend the offering more than twice.
Allstate Insurance Company and Allstate Life Insurance Company have agreed
not to transfer more than one-third of the shares received by them in connection
with the acquisition of MedRehab during any 30-day period without the prior
written consent of the Company.
Any securities covered by this Prospectus which qualify for sale pursuant
to Rule 144 under the Securities Act may be sold under Rule 144 rather than
pursuant to this Prospectus.
The Selling Stockholders are not restricted as to the price or prices at
which they may sell their Shares. Sales of such Shares at less than the market
prices may depress the market price of the Company's Common Stock.Except for the
limitations referred to above with respect to Allstate Insurance Company and
Allstate Life Insurance Company, the Selling Stockholders are not restricted as
to the number of Shares which may be sold at any one time, and it is possible
that a significant number of Shares could be sold at the same time.
Boston EquiServe, 150 Royall Street, Canton, Massachusetts 02021, is the
transfer agent for the Company's Common Stock.
LEGAL MATTERS
Certain legal matters with respect to the issuance of the Shares have been
passed upon for the Company by Testa, Hurwitz & Thibeault, LLP, High Street
Tower, 125 High Street, Boston, Massachusetts.
13
EXPERTS
The consolidated financial statements and the financial statement schedule
of Mariner Health Group, Inc. and subsidiaries appearing in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1995 incorporated by
reference in this Prospectus have been incorporated herein in reliance on the
report of Coopers & Lybrand L.L.P., independent accountants, given on the
authority of that firm as experts in accounting and auditing.
The consolidated statements of income, stockholders' equity and cash flows
of Pinnacle Care Corporation for the year ended December 31, 1993 included in
Mariner's consolidated financial statements referred to above and incorporated
by reference in this Prospectus have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report therein and incorporated
herein by reference. Such consolidated financial statements referred to above
are incorporated herein in reliance upon such report, given on the authority of
such firm as experts in accounting and auditing.
The combined balance sheet as of December 31, 1995 relating to certain
assets and liabilities of Convalescent Services, Inc. and affiliates acquired by
Mariner Health Group, Inc. on January 2, 1996 and the related statement of
operations, cash flows and changes in stockholders' deficit for the year then
ended incorporated by reference in this Prospectus have been incorporated herein
in reliance on the report of Coopers & Lybrand L.L.P., independent accountants,
given on the authority of such firm as experts in accounting and auditing.
The combined balance sheets as of December 31, 1993 and 1994 and the
related combined statements of operations, cash flows and changes in
stockholders' deficit for each of the three years in the period ended December
31, 1994 of Convalescent Services, Inc. and Affiliates incorporated by reference
in this Prospectus have been incorporated herein in reliance on the report of
Coopers & Lybrand L.L.P., independent accountants, given on the authority of
such firm as experts in accounting and auditing.
The balance sheets of Regency Health Care Centers, Inc. and subsidiaries as
of December 31, 1995 and 1994 and the related statements of operations,
shareholders' equity and cash flows for the years then ended incorporated by
reference in this Prospectus have been incorporated herein in reliance on the
report of Bennett Thrasher & Co. P.C., independent accountants, given on the
authority of such firm as experts in accounting and auditing.
The combined balance sheet of Allegis Health Services, Inc. and Affiliates
as of December 31, 1995 and the related combined statements of income,
stockholders and members' equity and cash flows for the year then ended
incorporated by reference in this Prospectus have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their report with
respect thereto, and are incorporated herein in reliance upon the authority of
such firm as experts in accounting and auditing.
14
================================================================================
No dealer, salesperson or any other person has been authorized to give any
information or to make any representations not contained in this Prospectus and,
if given or made, such information or representations must not be relied upon as
having been authorized by the Company. This Prospectus does not constitute an
offer to sell, or a solicitation of an offer to sell, any securities other than
the registered securities to which it relates, or an offer to or solicitation of
any person in any jurisdiction where such an offer or solicitation would be
unlawful. Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create an implication that the information
contained herein is correct as of any time subsequent to the date hereof.
---------------------
TABLE OF CONTENTS
Page
----
Available Information.................................................... 4
Information Incorporated by Reference.................................... 4
Trademarks............................................................... 5
The Company.............................................................. 5
Recent Developments...................................................... 5
Risk Factors............................................................. 5
Use of Proceeds.......................................................... 11
Selling Stockholders..................................................... 12
Plan of Distribution..................................................... 13
Legal Matters............................................................ 13
Experts.................................................................. 14
================================================================================
================================================================================
1,029,255 Shares
MARINER HEALTH GROUP, INC.
Common Stock
--------------------
PROSPECTUS
--------------------
_________ ____, 1997
================================================================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Estimated expenses payable in connection with the sale of the Common Stock
offered hereby are as follows:
Registration fee ................................................ $12,000
NASDAQ/NMS Additional Listing Fee ............................... $17,500
Legal fees and expenses ......................................... $30,000
Accounting fees and expenses .................................... $15,000
Blue Sky fees and expenses (including legal fees) ............... $5,000
-------
Total .................................................. $79,500
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Delaware General Corporation Law and the Company's certificate of
incorporation and by-laws provide for indemnification of the Company's directors
and officers for liabilities and expenses that they may incur in such
capacities. In general, directors and officers are indemnified with respect to
actions taken in good faith in a manner reasonably believed to be in, or not
opposed to, the best interests of the Company, and with respect to any criminal
action or proceeding, actions that the indemnitee had no reasonable cause to
believe were unlawful. Reference is made to the Company's restated certificate
of incorporation filed as Exhibits 3.2 and 4.2 to the Company's Registration
Statement on Form S-1 (No. 33-60736), the Company's certificate of amendment to
the restated certificate of incorporation filed as Exhibit 4.2 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1994 and
the Company's by-laws filed as Exhibits 3.2 and 4.2 to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1993 and incorporated
herein by reference.
ITEM 16. EXHIBITS.
**5 Opinion of Testa, Hurwitz & Thibeault, LLP
*23.1 Consent of Coopers & Lybrand L.L.P.
*23.2 Consent of Ernst & Young LLP
*23.3 Consent of Coopers & Lybrand L.L.P.
*23.4 Consent of Coopers & Lybrand L.L.P.
*23.5 Consent of Bennett Thrasher & Co. P.C.
*23.6 Consent of Arthur Andersen LLP
**23.7 Consent of Testa, Hurwitz & Thibeault, LLP
**24 Power of Attorney
- -----------
* Filed herewith
** Previously filed
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the
total dollar value of securities offered would not
exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) (ss. 230.424(b) of this chapter) if, in the
aggregate, the changes in volume and price represent
no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement; and
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the registration statement or any
material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in New London, Connecticut on January
31, 1997.
MARINER HEALTH GROUP, INC.
By:/s/ Arthur W. Stratton, Jr., M.D.
--------------------------------
Arthur W. Stratton, Jr., M.D.
Chief Executive Officer
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title(s) Date
--------- -------- ----
<S> <C> <C>
/s/Arthur W. Stratton, Jr., M.D. Chairman, Chief Executive Officer and January 31 1997
- ------------------------------------ Director (Principal executive officer)
Arthur W. Stratton, Jr., M.D.
/s/David N. Hansen Executive Vice President, Treasurer January 31, 1997
- ------------------------------------ and Chief Financial Officer
David N. Hansen (Principal financial and accounting
officer)
* Director January 31, 1997
- -----------------------------------
David C. Fries
* Director January 31, 1997
- ------------------------------------
Christopher Grant, Jr.
* Director January 31, 1997
- ------------------------------------
Stiles A. Kellett, Jr.
* Director January 31, 1997
- ------------------------------------
John F. Robenalt
*By: /s/ Arthur W. Stratton, Jr., M.D.
----------------------------------
Arthur W. Stratton, Jr., M.D.
Attorney-in-Fact
</TABLE>
EXHIBIT INDEX
Exhibit
No. Document
--- --------
**5 Opinion of Testa, Hurwitz & Thibeault, LLP
*23.1 Consent of Coopers & Lybrand L.L.P.
*23.2 Consent of Ernst & Young LLP
*23.3 Consent of Coopers & Lybrand L.L.P.
*23.4 Consent of Coopers & Lybrand L.L.P.
*23.5 Consent of Bennett Thrasher & Co. P.C.
*23.6 Consent of Arthur Andersen LLP
**23.7 Consent of Testa, Hurwitz & Thibeault, LLP
**24 Power of Attorney
- -----------------
* Filed herewith
** Previously filed
EXHIBIT 23.1
------------
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement
on Form S-3 (File No. 333-3314) of Mariner Health Group, Inc. of our report
dated May 30, 1996, on our audits of the financial statements and financial
statement schedule of Mariner Health Group, Inc. We also consent to the
reference to our firm under the caption "Experts."
/s/ Coopers & Lybrand L.L.P.
Boston, Massachusetts
January 31, 1997
EXHIBIT 23.2
------------
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Post-Effective Amendment No. 1 to the Registration Statement (Form S-3, No.
333-3314) and related Prospectus of Mariner Health Group, Inc. for the
registration of 1,029,255 shares of its common stock and to the incorporation by
reference therein of our report dated February 22, 1994, with respect to the
consolidated financial statements of Pinnacle Care Corporation, which report
appears in Mariner Health Group, Inc.'s Annual Report on Form 10-K for the year
ended December 31, 1995, as amended, filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
Nashville, Tennessee
January 31, 1997
EXHIBIT 23.3
------------
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement
on Form S-3 (File No. 333-3314) of Mariner Health Group, Inc. of our report
dated March 28, 1996, on our audit of the financial statements of certain assets
and liabilities of Convalescent Services, Inc. and affiliates acquired by
Mariner Health Group, Inc. on January 2, 1996. We also consent to the reference
to our firm under the caption "Experts."
/s/ Coopers & Lybrand L.L.P.
Boston, Massachusetts
January 31, 1997
EXHIBIT 23.4
------------
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the to the registration
statement of Mariner Health Group, Inc. on Form S-3 of our report dated March
31, 1995, on our audits of the combined financial statements of Convalescent
Services, Inc. and Affiliates as of December 31, 1994 and 1993, and for the
years ended December 31, 1994, 1993, and 1992. We also consent to the reference
to our firm under the caption "Experts."
/s/ Coopers & Lybrand L.L.P.
Atlanta, Georgia
January 31, 1997
EXHIBIT 23.5
------------
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Post-Effective
Amendment No. 1 to Registration Statement on Form S-3 of Mariner Health Group,
Inc. of our report dated February 7, 1996 on our audit of the financial
statements of Regency Health Care Centers, Inc. and subsidiaries as of December
31, 1995 and 1994 and for the years then ended and to the reference to our Firm
under the caption "Experts" in the Prospectus.
/s/ Bennett Thrasher & Co. P.C.
Atlanta, Georgia
January 31, 1997
EXHIBIT 23.6
------------
CONSENT OF INDEPENDENT ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated June 27, 1996 on
the financial statements of Allegis Health Services, Inc. and Affiliates as of
December 31, 1995 and for the year then ended included in Mariner Health Group,
Inc's Form 8-K dated July 31, 1996 and to all references to our Firm in this
registration statement.
/s/ Arthur Andersen LLP
Washington D.C.
January 31, 1997
