SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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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 3, 1997
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INTEGRATED HEALTH SERVICES, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-12306 23-2428312
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
10065 Red Run Boulevard, Owings Mills, Maryland 21117
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (410) 998-8400
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
ITEM 5. OTHER EVENTS
On November 3, 1997, Integrated Health Services, Inc. ("IHS") and
HEALTHSOUTH Corporation ("HEALTHSOUTH") entered into an agreement pursuant to
which IHS agreed to acquire from HEALTHSOUTH 139 owned, leased or managed
long-term care facilities, 12 specialty hospitals, a contract therapy business
having over 1,000 contracts and an institutional pharmacy business serving
approximately 38,000 beds. The businesses being acquired, which had annual
revenues of approximately $925 million for the 12 months ended August 31, 1997,
were acquired by HEALTHSOUTH in its recent acquisition of Horizon/CMS Healthcare
Corporation.
Under the terms of the agreement, IHS will pay $1.15 billion in cash
and assume approximately $100 million in debt. IHS will fund the purchase price
with available cash from term loan borrowings under its $1.75 billion revolving
credit and term loan facility and the sale of its 9 1/4% Senior Subordinated
Notes due 2008 and borrowings under the revolving credit portion of the new
credit facility. On a pro forma basis after giving effect to the acquisition of
these businesses from HEALTHSOUTH and the acquisition of RoTech Medical
Corporation, Community Care of America, Inc. and the lithotripsy division of
Coram Healthcare Corporation, IHS' total debt, including current portion,
accounted for approximately 74% of its total pro forma capitalization as of
September 30, 1997. Consummation of the transaction, which is expected to close
by December 31, 1997, is subject to, among other things, receipt of required
regulatory approvals, consent of IHS' senior lenders and other customary
conditions. IHS has deposited with HEALTHSOUTH $50 million, which amount will be
credited against the purchase price at the closing or retained by HEALTHSOUTH
under certain circumstances if the transaction is not consummated.
There can be no assurance that this transaction will be consummated on
these terms, on different terms or at all.
Donaldson Lufkin & Jenrette Securities Corporation and Morgan Stanley
Dean Witter Discover & Co. acted as financial advisors to IHS in the
transaction.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(C) EXHIBITS.
2 Purchase and Sale Agreement, entered into as of November 3,
1997, between HEALTHSOUTH Corporation, Horizon/CMS Healthcare
Corporation and Integrated Health Services, Inc.
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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.
INTEGRATED HEALTH SERVICES, INC.
Date: November 12, 1997 By: /s/ W. Bradley Bennett
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Name: W. Bradley Bennett
Title: Executive Vice President -
Chief Accounting Officer
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EXHIBIT INDEX
2 Purchase and Sale Agreement, entered into as of November 3,
1997, between HEALTHSOUTH Corporation, Horizon/CMS Healthcare
Corporation and Integrated Health Services, Inc.
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