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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
June 13, 2002
Date of Report (Date of earliest event reported)
GENTIVA HEALTH SERVICES, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-15669 36-433-5801
(State or other jurisdiction of (Commission file number) (I.R.S. Employer
incorporation or organization) Identification No.)
3 Huntington Quadrangle 2S, Melville, New York 11747-8943
(Address of principal executive offices)
(631) 501-7000
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
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Item 2. Acquisitions of Disposition of Assets.
On June 13, 2002, Gentiva Health Services, Inc. ("Gentiva") consummated the
sale of its Specialty Pharmaceutical Services ("SPS") business (the "SPS Sale")
to Accredo Health, Incorporated ("Accredo"). The SPS Sale was effected pursuant
to an asset purchase agreement (the "Asset Purchase Agreement"), dated January
2, 2002, between Gentiva, Accredo and certain of Gentiva's subsidiaries named
therein.
The assets of the SPS business acquired by Accredo in the SPS Sale were
assets used by Gentiva in the business of distribution of drugs and other
biological and pharmaceutical products and professional support services for
individuals with chronic diseases, the administration of antibiotics,
chemotherapy, nutrients and other medications for patients with acute or
episodic disease states, distribution services for pharmaceutical, biotechnology
and medical service firms and clinical support services for pharmaceutical and
biotechnology firms. The SPS business generated approximately 50% and 44% of
Gentiva's total net revenues, including intersegment revenues, for fiscal 2001
and fiscal 2000, respectively.
Pursuant to the terms of the Asset Purchase Agreement, Accredo acquired the
SPS business in consideration for (i) the payment to Gentiva of a cash amount
equal to $207.5 million, subject to a post-closing reconciliation based on the
net book value of the SPS business and (ii) 5,060,976 shares of Accredo common
stock. Of the cash portion of the consideration, $2 million was allocated as
consideration for the performance by Gentiva and its affiliates of covenants not
to compete and related restrictive covenants.
In connection with the SPS Sale, Gentiva's Board of Directors approved and
declared a special dividend (consisting of substantially all of the Accredo
common stock and cash consideration of the SPS Sale) payable to Gentiva's
shareholders of record as of June 13, 2002. The special dividend, which was
delivered to the distribution agent on June 13, 2002 for payment to Gentiva's
shareholders, results in Gentiva shareholders of record on the record date
receiving $7.76 in cash and .19253 shares of Accredo common stock for each share
of Gentiva common stock held. Cash will be paid to Gentiva shareholders in lieu
of fractional shares.
Gentiva has also entered into a new credit facility (the "New Facility")
that provides for borrowing capacity of $55 million and a new four-year term
with conditions and covenants substantially similar to its prior facility, which
was terminated. The New Facility was effective upon the close of the SPS Sale. A
copy of the New Facility is attached hereto as Exhibit 10.1 and incorporated
herein by reference.
On June 13, 2002, Gentiva issued the press release attached hereto as
Exhibit 99.1 and incorporated herein by reference. All information concerning
the SPS Sale and the special dividend to Gentiva's shareholders in Gentiva's
Definitive Proxy Statement on Schedule 14A, as filed with the Securities and
Exchange Commission (the "SEC") by Gentiva on May 10, 2002, is incorporated
herein by reference.
Item 5. Other Events.
In connection with the SPS Sale, Gentiva announced changes to its
management team. On June 14, 2002, Gentiva issued the press release attached
hereto as Exhibit 99.2 and incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired. Not Applicable
(b) Pro Forma Financial Information. The pro forma financial
information required pursuant to Item 7 of Form 8-K will be filed
by August 27, 2002, within 60 days after the date this report was
required to be filed.
(c) Exhibits. The following exhibits are filed herewith:
Exhibit No. Description
10.1 Loan and Security Agreement dated June 13, 2002 by and between
Fleet Capital Corporation, as Administrative Agent, on behalf of
the lenders named therein, Fleet Securities, Inc., as Arranger,
Gentiva Health Services, Inc., Gentiva Health Services Holding
Corp. and the subsidiaries named therein.
99.1 Press Release dated June 13, 2002
99.2 Press Release dated June 14, 2002
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 thereunto duly authorized.
Dated: June 21, 2002
GENTIVA HEALTH SERVICES, INC.
By: /s/ John R. Potapchuk
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Name: John R. Potapchuk
Title: Senior Vice President and
Chief Financial Officer