A Medical Device Daily
RehabCare Group (St. Louis) reported completing its acquisition of Symphony Health Services (Hunt Valley, Maryland) and its subsidiaries, RehabWorks, VTA Management Services and Polaris Group, for $101.5 million.
The transaction is RehabCare's largest investment to date toward its strategic plan of enhancing and integrating its post-acute services in key geographic markets.
“Our acquisition of Symphony immediately adds rehabilitation program management of 500 skilled nursing facility locations across the country, further developing our strategy in several specific markets across the country,“ said John Short, PhD, RehabCare president and CEO.
Symphony Health Services' family of companies is focused on delivering contract therapy, nursing and healthcare consulting services for the post-acute industry. Its RehabWorks division is one of the leading providers of physical, occupational and speech therapy services to long-term care facilities.
The combined organizations create a program management company represented in more than 1,400 healthcare facilities in 42 states, the District of Columbia and Puerto Rico, making it one of the largest physical rehabilitation providers in the U.S.
RehabCare Group said the blending of the two companies also will create operational synergies, with an estimated annual cost savings of $8 million to $12 million to be realized over the next 24 months.
R. Scott Jones, Symphony's president and CEO, has been named to lead a transition team comprised of executives from both companies.
Short said Symphony “took a very proactive approach to quality improvement and compliance management, utilizing some intensive and effective training programs. These training initiatives are one of many Symphony practices we will be looking to incorporate.“
He added that RehabCare Group “will be bringing them onto the Palm technology platform we employ in our clinical programs. It's all about creating better services for our clients and patients.“
As an initial step in the transition, RehabCare has incorporated RehabWorks' “heart and hand“ icon into its logo. “The icon represents a blend of compassion, care and healing, emblematic of the role of physical rehabilitation,“ said Short.
Cardinal Health (Dublin, Ohio) said it has reached an agreement to acquire five positron emission tomography (PET) radiopharmaceutical production facilities and manage a sixth site, in order to create a more efficient approach to the manufacture and distribution of PET radiopharmaceuticals.
Cardinal Health will acquire facilities in Newark, New Jersey; Dallas; Memphis, Tennessee; Birmingham, Alabama; and Columbus, Ohio, previously owned by Regional Nuclear Pharmaceuticals (RNP; Birmingham, Alabama). A management agreement will be put in place at a sixth site in Jackson, Mississippi, which formerly was managed by RNP.
Through the agreement, Cardinal Health will gain ownership of five cyclotrons and related lab equipment to produce fluorodeoxyglucose (FDG), the primary radiopharmaceutical used in PET diagnostic imaging.
Financial terms of the agreement were not disclosed.
Cardinal Health has been the distributor of the FDG produced at these sites but, through the agreement, now will have complete control of the manufacturing process.
The company said it expects to provide additional investment to upgrade the facilities and improve the consistency of service provided to PET imaging centers in these six regions.
Cardinal Health currently owns and operates 15 other FDG production facilities located throughout the U.S. and more than 158 nuclear pharmacies, 80 of which distribute radiopharmaceuticals for PET imaging.
“We continue to look for new ways to create efficiencies in the healthcare supply chain and improve service for our customers,“ said Michael Mullin, vice president of nuclear manufacturing services for Cardinal Health. “This investment will enable a more streamlined approach to deliver the highest level of quality and service to the PET imaging centers supported by our nationwide network.“
PET imaging is primarily used in the earlier diagnosis, staging and treatment monitoring of cancer, and the technology is expanding for use as a differential diagnosis of Alzheimer's disease and definitive cardiac assessment.
American Medical Systems Holdings (Minnetonka, Minnesota) said the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act in connection with its previously announced proposed $715 million acquisition of Laserscope (San Jose, California) expired on June 30.
The expiration of the Hart-Scott-Rodino waiting period satisfies one of the closing conditions contained in the June 3 merger agreement (Medical Device Daily, June 6, 2006) between AMS and Laserscope. Consummation of the transaction remains subject to other customary closing conditions.
AMS is a diversified supplier of medical devices and procedures to cure erectile dysfunction, benign prostatic hyperplasia, incontinence, menorrhagia, prolapse and other pelvic disorders in men and women. Its products were used to provide about 170,000 patient cures in 56 countries during 2005.
Laserscope manufactures an advanced line of minimally invasive medical products, including medical laser systems and related energy delivery devices for the physicians' office, outpatient surgical center and hospital markets.
In other dealmaking news:
• Encore Medical (Austin, Texas) said that it has closed on its previous agreement to sell its Slendertone U.S. consumer product line for cash consideration of about $6.8 million, primarily for the Slendertone inventory and all of Encore's U.S. distribution rights to Slendertone products.
The purchaser is Bio-Medical Research Ltd., an Ireland-based private company that owns all intellectual property rights to the Slendertone product line.
Encore said it intends to use the net proceeds from this sale toward its core Surgical Implant and Orthopedic Rehabilitation businesses.
• Renal Advantage (Brentwood, Tennessee), the fourth-largest provider of dialysis services in the U.S., reported that it has completed its previously reported acquisition of the assets of seven dialysis centers owned by Riverside Hospital, a subsidiary of Riverside Health System (both Newport News, Virginia).
The seven facilities are located in Newport News, Williamsburg, Gloucester and Smithfield, Virginia. Terms of the transaction were not disclosed.
Michael Klein, CEO of Renal Advantage, said, “This transaction … significantly expands our presence in Virginia. Simultaneous with the closing of the acquisition, we have also entered into a 10-year relationship with Riverside Health Systems to continue the provision of renal care services in markets served by Riverside Health System.“
Renal Advantage provides kidney dialysis services to about 7,400 patients in 80 facilities in 10 states. It also manages RenaLab, an independent clinical laboratory located in Jackson, Mississippi, with administrative offices in Nashville, and expects to close on its previously announced acquisition of the laboratory by year-end.
• MED Institute (West Lafayette, Indiana), a Cook Group (Bloomington, Indiana) company developing Cook's clinical trials, has acquired the former headquarters of Great Lakes Corp. (also West Lafayette) for expanded operations. Terms were not disclosed.
Neal Fearnot, president of MED Institute, said the acquisition “more than triples our space and should provide us room for even more growth as Cook expands its new product development and clinical trial activities globally.“
The new building – with more than 92,000 square feet of floor space and a “significant increase“ over MED's current headquarters – is adjacent to the Purdue Research Park that currently houses both MED Institute and a sister Cook Group company, Cook Biotech.
Cook develops technologies for drug-eluting and bare-metal stents, aortic and vascular endografts, catheters, wire guides, introducer needles and sheaths, embolization coils, medical biomaterials and contract manufacturing of biopharmaceuticals, vena cava filters and other minimally invasive medical devices.
• LifePoint Hospitals (Brentwood, Tennessee) said it has completed its previously disclosed acquisition of four hospitals from HCA (also Brentwood) for a purchase price of $239 million plus specific working capital, including inventory and the assumption of paid time off, as defined in the purchase agreement.
The four facilities include 200-bed Clinch Valley Medical Center (Richlands, Virginia); 325-bed St. Joseph's Hospital (Parkersburg, West Virginia); 155-bed Saint Francis Hospital (Charleston, West Virginia); and 369-bed Raleigh General Hospital (Beckley, West Virginia).
As also previously announced by LifePoint, it has classified St. Joseph's Hospital and Saint Francis Hospital as assets held for sale.
LifePoint also said that it has exercised its right under its existing senior credit agreement dated April 15, 2005, by Citicorp North America, as administrative agent, and the lenders involved, to increase the availability of term loans under the credit agreement by up to $50 million and has borrowed $50 million in the form of incremental term loans.
The proceeds of these incremental term loans have been used to finance the acquisition of the four hospitals from HCA.
William Carpenter III, president and CEO of LifePoint Hospitals, said, “While we are classifying St. Joseph's Hospital and Saint Francis Hospital as assets held for sale, we are committed to supporting these hospitals through this transition period and are encouraged by the early interest that we are receiving in these two facilities.“
LifePoint operates 53 hospitals, 49 in communities where LifePoint is the sole community hospital provider.
• Community Health Systems (CHS; Brentwood, Tennessee) reported the closing of the acquisition of the healthcare assets of Vista Health (Waukegan, Illinois), which include Victory Memorial Hospital (336 licensed beds) and St. Therese Medical Center (currently utilizing 71 non-acute care beds), both located in Waukegan and to be renamed Vista Medical Center East and Vista Medical Center West, respectively.
Other assets being acquired are Vista Imaging Center (Gurnee, Illinois), Vista Surgery and Treatment Center (Lindenhurst, Illinois) and Vista M.R. Institute, with locations in Lindenhurst and Gurnee.
CHS owns, leases or operates 76 hospitals in 22 states.