July 6, 2000-NAHC, Inc. (OTC Bulletin Board:NAHC, formerly NovaCare, Inc.,) reported a resolution in the arbitration of its dispute with Hanger Orthopedic Group, Inc. (NYSE: HGR) relating to the sale of NovaCare Orthotics & Prosthetics to Hanger last year. The arbitration involved a dispute concerning the appropriate purchase price reduction, based on a contractual post-closing working capital adjustment.
Under the Purchase and Sale Agreement, if NovaCare Orthotics & Prosthetics' adjusted working capital was less than $93,982,000 on June 30, 1999, Hanger would be entitled to a post-closing purchase price reduction. The arbitration was settled by the independent account firm KPMG LLP, who found that the adjusted working capital at June 30, 1999 was $68,878,000. As a result, NAHC is required to pay Hanger $25,104,000 as a reduction in purchase price. Of this amount, approximately $15 million has been paid out of an escrow account that was established at the closing of the sale. Earlier this week NAHC paid Hanger approximately $6 million and issued a promissory note for the remaining $3.7 million plus 7% interest, which will be paid monthly over the next six months.
CONTACT: NAHC, Inc.
David R. Burt
President and Chief Executive Officer
610/992-7450 |
