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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): April 21, 1997
OCCUSYSTEMS, INC.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 0-24440 75-2543036
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(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
incorporation) Number)
3010 LBJ Freeway
Suite 400
Dallas, Texas 75234
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(Address of Principal Executive Offices) (Zip Code)
(972) 484-2700
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(Registrant's Telephone Number, Including Area Code)
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ITEM 5. OTHER EVENTS
See the following press release attached hereto as Exhibit 99.1, dated
April 21, 1997, announcing the Company's agreement to a merger with CRA Managed
Care, Inc.
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SIGNATURES
Pursuant to the requirements of the Security and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
OCCUSYSTEMS, INC.
By:
Date: April 23, 1997 /s/ John K. Carlyle
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John K. Carlyle
Chairman and Chief Executive Officer
/s/ James M. Greenwood
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James M. Greenwood
Senior Vice President and
Chief Financial Officer
(Principal Accounting Officer)
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
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Contacts:
Donald J. Larson John K. Carlyle
President and Chief Executive Officer Chairman and Chief Executive Officer
CRA Managed Care, Inc. OccuSystems, Inc.
(617) 367-2163 (972) 484-2700
OCCUSYSTEMS AND CRA MANAGED CARE AGREE TO MERGE
BOSTON, Massachusetts and DALLAS, Texas (April 21, 1997) - CRA Managed Care,
Inc. (Nasdaq/NM: CRAA) and OccuSystems, Inc. (Nasdaq/NM: OSYS) today jointly
announced that the two companies have agreed to a merger that will create the
nation's first fully integrated managed care company focused on workers'
compensation cost containment. The new company formed by this merger,
Concentra(R) Managed Care, Inc., will provide preventive services, first report
of injury, primary care, specialist networks, specialized cost containment
services, and field case management for worker's compensation as well as for
the disability and automobile injury markets. Concentra Managed Care will have
operations in 49 states, the District of Columbia, and Canada. The combined
revenues for the year ended December 31, 1996, were approximately $350 million,
and the two companies currently have a combined market capitalization of
approximately $800 million.
John K. Carlyle, Chairman and Chief Executive Officer of OccuSystems, will
become Chairman of Concentra Managed Care. Commenting on the announcement, he
said, "This union combines the considerable strengths and capabilities of the
industry's leading participants to form a company that is well positioned to
capitalize on the trends emerging in workers' compensation. With complementary
business models now to be joined into one unified company, Concentra Managed
Care will offer prospective and retrospective services to employers and insurers
of all sizes, and these services will be especially appealing to those who seek
broad geographic coverage for a comprehensive solution to their workers'
compensation needs in multiple locations. As one company, we will be strongly
positioned to participate across the continuum of care, bringing a full solution
to bear on costs throughout the entire injury resolution process."
Donald J. Larson, presently President and Chief Executive Officer of CRA,
will be President and Chief Executive Officer of the new combined company. He
added, "By combining OccuSystems' network of affiliated physicians with CRA's
preferred provider organization, we
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CRAA AND OSYS to Merge
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April 21, 1997
are creating a network of providers for workers' compensation that is
unparalleled in scope, national presence, and breadth of services. Because of
CRA's broad range of cost containment and case management services, this merger
positions Concentra Managed Care to meet a full spectrum of customer needs in
workers' compensation, including primary care clinical services and preventive
patient management. Furthermore, by enhancing our ability to direct care and to
take an outcomes-driven approach to managed care, the merger with OccuSystems
will provide additional opportunities for growth in workers' compensation, and
for continued expansion into other markets such as disability claims and
automobile injuries."
The merger has been structured as a tax-free stock-for-stock exchange to be
accounted for as a pooling of interests. The outstanding shares of both
companies will be exchanged for new shares in Concentra Managed Care on the
basis that each share of OccuSystems will equate to 0.56 shares of CRA.
OccuSystems' 21.6 million shares will be exchanged for 57.3% of the combined
company, while CRA's 9.0 million shares will be exchanged for 42.7% of Concentra
Managed Care.
In connection with the merger agreement, CRA and OccuSystems mutually have
granted each other an option to purchase up to 10% of each other's common stock,
exercisable upon termination of the merger agreement under certain
circumstances. In the event the merger is similarly terminated by either
company, CRA and OccuSystems also have agreed that the terminating company will
pay the other company a termination fee of $10 million.
Alex. Brown & Sons is serving as financial advisor to CRA and has rendered
a fairness opinion to CRA's Board of Directors with respect to the proposed
merger. Donaldson, Lufkin & Jenrette Securities Corporation is serving as
financial advisor to OccuSystems and has rendered a fairness opinion to
OccuSystems' Board of Directors. The merger agreement was unanimously approved
by both companies' Boards of Directors earlier today.
The merger remains subject to approval by the companies' stockholders, and
special meetings for this purpose are expected to be scheduled early in the
third quarter of 1997. The merger also is contingent on applicable waiting
periods under the Hart-Scott-Rodino Antitrust Improvements Act and other
customary conditions.
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CRAA and OSYS to Merge
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April 21, 1997
Concentra Managed Care will be headquartered in Boston. The Board of
Directors will consist of at least eight members, with CRA and OccuSystems each
nominating four directors. The new management team for Concentra Managed Care
will reflect a combination of the senior officers of the merging companies. The
company will maintain regional offices in Dallas for its practice management
services, development activities, legal services, and certain other
administrative functions.
CRA Managed Care provides managed care services designed to reduce the
costs associated with workers' compensation, automobile and disability insurance
claims. The company operates one of the largest field case management
organizations in North America, consisting of 119 offices with approximately
1,200 field case managers who provide medical management and return to work
services in 49 states, Washington D.C., and Canada. CRA also provides a broad
range of specialized cost containment services from 78 service locations
including utilization management, telephonic case management and retrospective
medical bill review.
OccuSystems is the nation's largest physician practice management company
focusing on occupational healthcare. OccuSystems provides the management,
facilities, administrative and technical support, injury management, physical
therapy services and other ancillary services necessary to establish and
maintain a fully integrated network of occupational healthcare providers.
OccuSystems currently manages the practices of 203 physicians in the company's
117 occupational healthcare centers located in 32 markets in 16 states.
Statements contained in this news release that are not based on historical
facts are forward-looking statements which are subject to uncertainties and
risks, including, but not limited to, the successful completion of the herein
described merger, demand for the companies' products and services, economic and
competitive conditions, the availability of other appropriate acquisition
candidates, access to borrowed or equity capital on favorable terms, and other
risks detailed in the companies' Securities and Exchange Commission filings.
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