Hanger & NovaCare Merge
OnwardMike at aol.com
OnwardMike at aol.com
Wed Apr 7 00:38:23 PDT 1999
In a message dated 4/6/99 9:25:04 PM Pacific Daylight Time, kaderli at juno.com
<< Hanger Orthopedic To Buy NovaCare Unit (Last updated 8:05 AM ET April 5)
BETHESDA, Md. (Reuters) >> <snip>
The Wall Street Journal's Tuesday story -- appended below -- contains some
additional information about NovaCare and why they sold. They have been
doing very poorly and apparently are having trouble collecting from Medicare
on their prosthetics business.
If that's so, putting the business in the hands of financially stronger
Henger might be a plus.
The Wall Street Journal Interactive Edition
Tuesday, April 6, 1999
Hanger Orthopedic Agrees
To Buy NovaCare Division
By a WALL STREET JOURNAL Staff Reporter
BETHESDA, Md. -- In its latest bid to dominate the orthotics and
prosthetics industry, Hanger Orthopedic Group Inc. said it agreed to
acquire a division of health-care company NovaCare Inc., King of
Prussia, Pa., for $417 million.
The transaction, which is expected to close by June 15, also includes
$38 million in debt. In New York Stock Exchange composite trading
Monday, Hanger shares soared $1.875, or 14%, to $14.875, and
NovaCare rose 43.75 cents, or 37%, to $1.625.
Hanger has been on a buying spree, acquiring 18 companies in 1998
and half a dozen, including this one, in 1999. With the NovaCare
deal, Hanger will have 625 outlets in 43 states, making the company
"the pre-eminent player" in the industry, said Hanger's chief executive,
Mr. Sabel said Hanger plans to continue acquiring companies
domestically. After that, he said he would begin acquiring companies
abroad "to create a global prosthetics and orthotics provider."
NovaCare is selling its prosthetics and orthotics unit, which it acquired
in 1992, "to solidify our balance sheet in light of these difficult times,"
CEO Timothy Foster said.
NovaCare, which also provides geriatric and outpatient-rehabilitation
services and has an employee-services business, has been hard hit
in recent quarters because of ongoing changes in Medicare
reimbursement policies. Its orthotics and prosthetics unit, with annual
revenue of $280 million, represents about a quarter of NovaCare's
rehabilitation business. The unit has 369 patient-care centers in 38
Copyright © 1999 Dow Jones & Company, Inc. All Rights Reserved.
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