Kuala Healthcare Inc. Signs Letter Of Intent To Sell A 49 Percent Interest In Skilled Nursing Facilities And Kuala's Institutional Pharmacy
ENGLEWOOD CLIFFS, N.J.--(BW HealthWire)--Sept. 17, 1998--
Kuala Healthcare Inc. Clearing Way To Focus On Assisted Living;
Kuala Healthcare And Care One
To Establish Assisted Living Joint Venture
Kuala Healthcare, Inc. (Nasdaq:KUAL) today announced the signing of a non-binding letter of intent with Care One, LLC, a privately held long-term care company, to create a jointly owned corporation, with Kuala holding a 51 percent interest and Care One a 49 percent interest. The assets of the new entity will be comprised of Kuala's five skilled nursing facilities and its one residential healthcare facility. As part of the transaction, Care One will manage the facilities and hold an option to purchase Kuala's 51 percent at a specified price after a specified time period. The agreement also includes the sale of Kuala's institutional pharmacy to Care One.
The letter of intent also provides for the formation of an assisted living joint venture which will include Kuala's 120-bed assisted living project in Norwood, N.J and contemplates development of additional assisted living facilities. Kuala anticipates receiving development and management fees for assisted living projects developed through this venture.
The purchase price for the 49 percent interest in the skilled nursing facilities and 100 percent of Kuala's institutional pharmacy business is based on a valuation of approximately $67 million before taking account of related debt. Under the terms of the agreement, Care One's option to purchase the remaining 51 percent interest in the skilled nursing facilities will be based on a valuation of $68 million before taking into account related debt. In addition, Care One will be contributing $2 million and Kuala will be contributing certain assets to the assisted living joint venture.
Commenting on the announcement, Jack Rosen, president and chief executive officer of Kuala Healthcare, Inc., stated, "The transaction would lay the groundwork for Kuala to focus as well as accelerate its capital and management talent on the acquisition and development of additional assisted living facilities. In addition, we are enthusiastic about the opportunity to collaborate with Care One, LLC on a joint venture in the assisted living sector."
The transaction is contingent upon a number of conditions including Kuala's stockholder and lender approval, definitive documentation and satisfactory completion of due diligence by Care One.
Kuala Healthcare, Inc. is a leading integrated alternative healthcare provider. The company owns and operates five skilled nursing facilities and one residential healthcare facility in New Jersey and Pennsylvania, and owns a majority of the stock of Infu-Tech, Inc. (Nasdaq: INFU), a leading provider of infusion therapy and other medical products and services to patients in their homes and in long-term care facilities. |
