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OMB APPROVAL
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OMB Number: 3235-0060
Expires: December 31, 1997
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UNITED STATES
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
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TOTAL RENAL CARE HOLDINGS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-4034 51-0354549
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
21250 Hawthorne Boulevard, Suite 800, Torrance, California 90503
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(Address of principal executive offices) (Zip Code)
Registrants' telephone number, including area code (310) 792-2600
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N/A
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(Former name or former address, if changed since last report.)
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Item 5. Other Events.
On November 18, 1997, Total Renal Care Holdings, Inc. ("TRCH") and
Nevada Acquisition Corp., a wholly owned subsidiary of TRCH ("Newco"),
entered into an Agreement and Plan of Merger dated as of November 18,
1997 by and among TRCH, Newco, and Renal Treatment Centers, Inc.
("RTC"). Pursuant to and subject to the terms and conditions of the
Merger Agreement, Newco will be merged with and into RTC, and 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 stockholders of TRCH and RTC 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 or will occur on this timetable.
A copy of the press release issued by TRCH on November 19, 1997, with
respect to the Merger, is attached hereto as Exhibit 99.1 and is
incorporated by reference herein.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
<TABLE>
Exhibit No. Description
----------- -----------
<C> <S>
99.1 Press Release dated November 19, 1997
</TABLE>
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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.
<TABLE>
<S> <C>
Total Renal Care Holdings, Inc.
--------------------------------------------
(Registrant)
Date November 21, 1997 By: /s/ John E. King
------------------------------- ----------------------------------------
(Signature)*
John E. King
*Print name and title of the Vice President, Finance and Chief
signing officer under his signature. Financial Officer
</TABLE>
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<PAGE>
EXHIBIT 99.1
(BW) (TOTAL-RENAL-CARE) (TRL) (RXT) Total Renal Care and Renal
Treatment Centers Agree to Merge
Business Editors/Health & Medical Writers
TORRANCE, Calif. -- (BW HealthWire) -- Nov. 19, 1997 --
TRC To Exchange 1.335 Shares For Each RTC Share
In $1.3 Billion Pooling-Of-Interests Transaction
HIGHLIGHTS INCLUDE:
-- Immediately accretive to TRC earnings per share
-- 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
-- Provides strong platform to accelerate TRC's aggressive, yet
disciplined, growth strategy both domestically and internationally
-- Combined Q3 annualized net revenues, EBITDA and net income of
approximately $800 million, $200 million and $70 million, respectively
-- increased critical mass to provide significant cost savings and
synergies
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 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 patents, 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 out
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
$22.8 million of annual cost savings and synergies to be achieved in 1998 and
1999, respectively, and we expect the transaction to be immediately accretive to
earnings."
The merger, which requires approval of both companies' shareholders, is
subject to other customary closing conditions and is expected to be consummated
in the first quarter of 1998.
Donaldson, Lufkin & Jenrette Securities Corporation is serving as financial
adviser to TRC, and UBS Securities LLC is acting as financial adviser to RTC.
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<PAGE>
Total Renal Care
Selected operating & financial results
($ in millions except net revenue per treatment data)
<TABLE>
<CAPTION>
CURRENT
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TRC RTC COMBINED
--------- ---------- ----------
<S> <C> <C> <C>
Centers:
Domestic 188 136 324
International 6 28 34
Total Current 194 164 358
Agreements (definitive or in principle) 15 16 31
Total projected year-end 209 180 389
Patients:
Domestic 14,650 9,450 24,100
International 250 1,550 1,800
Total Current 14,900 11,000 25,900
Agreements (definitive or in principle) 1,500 2,200 3,700
Total projected year-end 16,400 13,200 29,600
<CAPTION>
QUARTER ENDED SEPTEMBER 30, 1997
ANNUALIZED
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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%
</TABLE>
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.)
CONTACT: Total Renal Care, Inc.
Victor M. G. Chaltiel, CEO
or John E. King, CFO
310/792-2600
or
The Financial Relations Board
Daniel Saks/Larry Delaney, General Info.
Moira Conlon, Investor Contact
310/442/0599
Kathy Brunson, Investor Contact
312/266-7800
or
Renal Treatment Centers, Inc.
Robert L. Mayer, Jr., President & CEO
Ronald H. Rodgers, Jr., CFO
610/644-4796
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