MATRIA JUST GAVE US A CHRISTMAS GIFT: (EARNINGS TO BE ACCRETIVE IN 99)
Matria Healthcare Announces Acquisition of Gainor Medical
MARIETTA, Ga., Dec. 22 /PRNewswire/ -- Matria Healthcare, Inc. (Nasdaq: MATR) announced today the signing of a definitive agreement to acquire the business and assets of Gainor Medical Management ("Gainor"), a privately held diabetes disease management company based in McDonough, Georgia.
This transaction marks a major step in Matria's strategy to expand its presence and capabilities in disease management. Gainor's strong global position in the diabetes disease management market will complement Matria's disease management infrastructure and broaden the scope of Matria's diabetes business internationally through expanded services, innovative products, a larger patient base and enhanced relationships with self-insured companies, managed care organizations and key diagnostic companies.
Gainor's current annualized run rates for revenue and pre-tax earnings are $98 million and $11 million, respectively. Gainor's Healthcare Management Solutions ("HMS") business unit provides disease management services to employees and dependants of self-insured companies, primarily focusing on U.S. Fortune 1000 companies, but with increasing emphasis on middle-market organizations. HMS's major clients include Motorola, Panasonic and Black & Decker. Gainor's Diabetes Self Care unit provides similar services as HMS, but is focused on the Medicare market. Both of these domestic diabetes disease management business units market and sell mail-order supplies to diabetes patients including insulin, strips, lancets, syringes, monitors, and other prescription and non-prescription drugs. Gainor's operations also include its microsampling business unit, which markets and distributes lancets and other related diabetes care products, and which holds an estimated 26% world market share in that product segment. Internationally, Gainor owns Germany's largest pure-play diabetes disease management company, providing comprehensive diabetes management programs to patients. Gainor's international microsampling group, based in England and McDonough, actively covers in excess of 50 countries.
The Company expects the purchase price to be approximately $130 million, and the transaction will be accounted for under the purchase method of accounting. The financial consideration will be comprised of approximately $85 million in cash at closing, and $45 million in Preferred Stock, some of which is convertible and includes warrants. In addition to the aforementioned purchase price, if certain financial performance thresholds are achieved for the year ending 1999, up to $35 million of contingent subordinated notes could be issued in 2000. The transaction is expected to be accretive to Matria's 1999 earnings.
The Board of Directors of each company has approved the acquisition which is anticipated to be completed in mid-January, subject to certain conditions, including bank financing and federal antitrust review. At the closing of the transaction, Matria's Board of Directors will be expanded to nine seats with the addition of Mark J. Gainor, Chief Executive Officer of Gainor Medical, and Rod F. Dammeyer, Managing Director of Equity Group Corporate Investments, a privately held investment firm controlled by Sam Zell. Bowles Hollowell Conner & Co., a division of First Union Capital Markets, served as financial advisor to Matria in connection with this transaction.
Donald R. Millard, President and Chief Executive Officer of Matria, commented, "This transaction will make our combined organization the pre- eminent pure-play disease management company. The incorporation of Gainor's business units into Matria's infrastructure will allow us to leverage our clinical management and information technology on a global scale and more than double our census of active patients under management. In addition, this strategic acquisition will allow Matria to capitalize on our existing relationships with managed care organizations, as well as increase our visibility with self-insured employers."
Mark J. Gainor, Chief Executive Officer of Gainor Medical elaborated, "By joining with Matria, we will be able to more rapidly penetrate the U.S. and international diabetes disease management markets. Numerous cross-selling opportunities with certain self-insured employers and managed care organizations will be possible with our combined business, as well as expanded international opportunities. Additionally, Matria's expertise in patient assessment, electronic diagnosis and monitoring, therapeutic interventions, case management, and outcomes measurement will complement Gainor's existing disease management capabilities in diabetes."
Parker H. Petit, Chairman of Matria stated, "In the months ahead, our shareholders should begin to appreciate the positive results from this exciting combination. We are fortunate to have Gainor Medical join us in support of our commitment to diabetes and our disease management strategic plans."
This press release contains forward-looking statements that involve risks and uncertainties, including developments in the healthcare industry, third- party actions over which the Company does not have control, and regulatory requirements applicable to the Company's business, as well as other risks detailed from time to time in the Company's reports filed with the Securities and Exchange Commission.
Matria Healthcare, Inc. is the leading provider of comprehensive disease management services for health plans and employers for women's health and the chronic conditions of diabetes, respiratory disorders, and cardiovascular disease.
SOURCE Matria Healthcare, Inc.
CO: Matria Healthcare, Inc.; Gainor Medical Management
ST: Georgia
IN: HEA
SU: TNM
12/22/98 08:26 EST prnewswire.com |
