UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): June 8, 2005
REHABCARE GROUP, INC.
(Exact name of Company as specified in its charter)
Delaware 0-19294 51-0265872
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
7733 Forsyth Boulevard
Suite 2300
St. Louis, Missouri 63105 (Address of principal executive offices) (Zip Code)
(314) 863-7422 (Company's telephone number, including area code)
Not applicable
(Former name or former address if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the Company under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On June 8, 2005, RehabCare Group East, Inc., a wholly owned subsidiary of
RehabCare Group, Inc. ("RehabCare") entered into a definitive Asset Purchase
Agreement (the "Purchase Agreement") with MeadowBrook Healthcare, Inc. and
certain of its subsidiaries ("MeadowBrook"). Pursuant to the Purchase Agreement,
RehabCare agreed to acquire substantially all of the operating assets of
MeadowBrook, which operates two freestanding acute rehabilitation hospitals and
two long-term acute care hospitals, for a purchase price of approximately $35
million in cash and notes, subject to certain working capital and other
adjustments. Under the Purchase Agreement, certain existing liabilites of
MeadowBrook, including liabilites with respect to certain litigation matters,
will be excluded from the transaction and will not be assumed by RehabCare. The
transaction, which is subject to certain closing conditions, is expected to
close July 31, 2005 and will be funded by RehabCare through a combination of
cash on hand, subordinated notes and borrowings against its senior credit
facility.
Item 9.01 Financial Statements and Exhibits.
On June 9, 2005, RehabCare Group, Inc. issued a press release announcing
the signing of a definitive agreement to purchase the operating assets of
MeadowBrook Healthcare, Inc.
The press release in its entirety is attached hereto as Exhibit 99.1 and is
filed as part of this report.
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.
Dated: June 13, 2005
REHABCARE GROUP, INC.
By: /s/ Vincent L. Germanese
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Vincent L. Germanese
Senior Vice President,
Chief Financial Officer
and Secretary
Exhibit 99.1
CONTACT: RehabCare Group, Inc.
Vincent L. Germanese
Chief Financial Officer
Press: David Totaro, Senior Vice President,
Corporate Marketing & Communications
(314) 863-7422
Financial Dynamics
Gordon McCoun/Theresa Kelleher
Press: Sean Leous
(212) 850-5600
or
MeadowBrook Healthcare Inc.
John W. McRoberts
President and CEO
(205) 980-9970
FOR IMMEDIATE RELEASE
THURSDAY, JUNE 9, 2005
REHABCARE GROUP ANNOUNCES DEFINITIVE AGREEMENT TO PURCHASE
MEADOWBROOK HEALTHCARE
- Acquisition Provides Strong Continuum Opportunities in Important Markets -
ST. LOUIS, MO, June 9, 2005--RehabCare Group, Inc. (NYSE:RHB) today announced
that it has signed a definitive agreement to purchase the operating assets of
MeadowBrook Healthcare Inc. for approximately $35 million in cash and notes.
Based in Birmingham, AL, MeadowBrook, with 744 employees, is a
privately-owned company that operates two freestanding acute rehabilitation
hospitals and two long-term acute care hospitals ("LTACHs"):
o West Gables Rehabilitation Hospital, Miami, FL, and Clear Lake
Rehabilitation Hospital, Webster, TX are both 60-bed acute rehabilitation
hospitals that provide a wide range of programs and services on both an
inpatient and outpatient basis. West Gables will complement RehabCare's
post-acute continuum in the greater Miami area which includes seven skilled
nursing facilities and Clear Lake will become part of RehabCare's
post-acute continuum in the metropolitan Houston area, which includes 16
skilled nursing facilities and one inpatient rehabilitation facility.
o MeadowBrook Specialty Hospital of Tulsa, Tulsa, OK, is a freestanding
60-bed facility offering specialized inpatient programs. This operation
will complement RehabCare's two skilled nursing facilities in the Tulsa
area.
o MeadowBrook Specialty Hospital, Lafayette, LA, is composed of two
facilities. The main campus is a 50-bed LTACH dedicated to providing
specialized acute care for medically complex patients. The other Lafayette
campus is a 20-bed hospital in a hospital ("HIH") facility, which provides
specialized nursing care for patients within Our Lady of Lourdes Regional
Medical Center with six step-down, high observation rooms, and 14
medical-surgical rooms. This specialty hospital complements RehabCare's
five skilled nursing facilities in the Lafayette area.
MeadowBrook generated revenue in 2004 of approximately $53 million.
RehabCare expects the acquisition to be modestly accretive to 2005 earnings. In
addition, the MeadowBrook facilities will maintain their respective names after
the completion of this transaction.
John H. Short, Ph.D., President and CEO of RehabCare, commented, "The
acquisition of MeadowBrook Healthcare is the largest transaction to date in
executing our strategy to deliver the post-acute continuum of rehabilitative
care. In addition, we will be operating four excellent free-standing hospitals
which, when combined with our existing rehabilitation programs in those regions,
will generate four new target market opportunities for RehabCare."
"Finally, adding the operations of these four hospitals and MeadowBrook's
extensive and proven back office capabilities gives us a strong platform for our
freestanding operations, and leverages our overhead and expertise much more
efficiently."
John W. McRoberts, President and CEO of MeadowBrook, added, "We are very
pleased and excited to join forces with RehabCare. We believe the rehabilitation
and clinical services provided by both companies are complementary to each
other, which results in an excellent strategic fit as we develop the post-acute
continuum in our markets. At MeadowBrook, our goal is to provide for the
healthcare community's post-acute needs, and partnering with RehabCare allows us
to align ourselves with one of the best, most far reaching rehabilitation
providers in the nation. While MeadowBrook will now be positioned for a larger
market presence, the treatment protocols will remain consistent across settings.
We envision that this partnership will not only create opportunities for
expansion into new markets, but will provide greater resources to our patients
and opportunities for our employees."
The transaction is expected to close by July 31, 2005. LSC Healthcare
Partners, a Chicago-based healthcare investment banking firm, acted as financial
advisor to RehabCare and First Albany Capital, a national, full service
investment banking firm, acted as financial advisor to MeadowBrook in this
transaction.
RehabCare Group, Inc., headquartered in St. Louis, MO, is a leading
provider of contract therapy and program management services for hospital
inpatient rehabilitation, skilled nursing units, and outpatient therapy programs
in conjunction with more than 890 hospitals and skilled nursing facilities in 37
states, the District of Columbia and Puerto Rico. RehabCare is pleased to be
included in the Russell 2000 and Standard and Poor's Small Cap 600 indices.
MeadowBrook Healthcare, Inc., a privately-owned company headquartered in
Birmingham, AL, provides post-acute healthcare services through two inpatient
rehabilitation hospitals and two long-term acute care hospitals. These four
hospitals are licensed for a total of 250 beds, operate with approximately 744
employees and are located in Florida, Louisiana, Oklahoma, and Texas.
This release contains forward-looking statements that are made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Forward-looking statements involve known and unknown risks and
uncertainties that may cause RehabCare's actual results in future periods to
differ materially from forecasted results. These risks and uncertainties may
include, but are not limited to, the ability of RehabCare to integrate
acquisitions and to implement client partnering relationships within the
expected timeframes and to achieve the revenue and earnings levels from such
acquisitions and relationships at or above the levels projected; changes in and
compliance with governmental reimbursement rates and other regulations or
policies affecting RehabCare's businesses; RehabCare's ability to attract new
client relationships or to retain and grow existing client relationships through
expansion of RehabCare's contract therapy and hospital rehabilitation service
offerings and the development of alternative product offerings; the future
financial results of InteliStaf Holdings, Inc., and RehabCare's other
unconsolidated affiliates, and the effect of those results on the financial
condition and results of operations of RehabCare; the adequacy and effectiveness
of RehabCare's operating and administrative systems; RehabCare's ability to
attract and the additional costs of attracting administrative, operational and
professional employees; significant increases in health, workers' compensation
and professional and general liability costs; litigation risks of RehabCare's
past and future business, including RehabCare's ability to predict the ultimate
costs and liabilities or the disruption of its operations; competitive and
regulatory effects on pricing and margins; and general and economic conditions,
including efforts by governmental reimbursement programs, insurers, healthcare
providers and others to contain healthcare costs.
NOTE: More information on RehabCare can be found on the World Wide Web at
http://www.rehabcare.com
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