THE COOPER COMPANIES AGREES TO ACQUIRE NU-MED SUBSIDIARY, HOSPITAL GROUP OF AMERICA, INC.
THE COOPER COMPANIES AGREES TO ACQUIRE NU-MED SUBSIDIARY, HOSPITAL GROUP OF AMERICA, INC. NEW YORK, April 8 /PRNewswire/ -- The Cooper Companies, Inc. (NYSE: COO) announced that PSG Acquisition, Inc., a wholly owned subsidiary of Cooper, has agreed to acquire Hospital Group of America, Inc. (HGA) from PsychGroup, Inc., the psychiatric healthcare service subsidiary of Nu-Med, Inc. (NASDAQ: NUMS), and to manage PsychGroup's remaining three facilities. The acquisition includes the purchase of three hospitals with a total of 259 beds and a three-year, $6 million contract to manage PsychGroup's three other facilities which have an additional 224 beds. Subject to regulatory approvals and other conditions including the agreement of PsychGroup's management to enter into multi-year employment contracts, Cooper expects the acquisition to close by May 29, 1992. The purchase price consists of a combination of $38.6 million of cash and assumed debt, and $21.7 million face amount of NU-Med senior subordinated debentures which will be delivered by Cooper. As of the first quarter ended Jan. 31, 1992, Cooper's balance sheet reflected over $142 million in cash, cash equivalents, restricted cash and marketable securities, and approximately $49 million in long-term debt. On a pro forma basis, had the transaction closed Jan. 31, 1991, completion of the acquisition and the corresponding management agreement would have improved Cooper's financial results by more than doubling revenues and contributing approximately $12 million in EBITDA (earnings before interest, taxes, depreciation and amortization). Gary A. Singer and Bruce D. Sturman, co-chairmen of The Cooper Companies, Inc., said in a jointly released statement, "The acquisition of HGA, noted for its management strength and profitable operations, may be the most important step to-date in facilitating the turnaround of The Cooper Companies. As a broader based healthcare company, providing both devices and now services to niche markets, Cooper will be less dependent upon the contact lens industry and better positioned to participate in the growth of the healthcare industry overall." Singer and Sturman also noted that HGA has reported sustained financial growth and consistent cash flow generation while the psychiatric care industry has been subject to declining reimbursements, increased competition and declining occupancy levels. HGA's management is expected to report record financial results for the fiscal year ending April 30, 1992, with net revenue of approximately $51 million and operating profits exceeding $8 million. PsychGroup, Inc. PsychGroup, Inc., created in 1986 by Nu-Med's corporate reorganization of its two independent psychiatric healthcare companies acquired in 1985, owns and operates five psychiatric hospitals and one substance abuse treatment center, four of which are located within 50 miles of Philadelphia. PsychGroup's 483 licensed beds provide treatment for children, adolescents and adults suffering from a variety of mental illnesses and chemical dependencies. Specialized programs are offered to treat self-injury, multiple personalities, and emotional and physical abuse. HGA, co-founded in 1983 by PsychGroup's Chief Executive Officer Edmund Bujalski and Executive Vice President Eugene Langan, owns and operates Hartgrove Hospital in Chicago; Hampton Hospital in central New Jersey (Rancocas and Marlton); and Meadow Wood Hospital in New Castle, Del. Hartgrove, a 109-bed facility opened in 1970 and expanded in 1982, offers a broad range of inpatient, substance abuse and diagnostic treatments for all age groups. Hampton Hospital, a 100-bed facility built in 1986 in Rancocas and including an outpatient facility located in nearby Marlton, provides specialized programs dealing with adolescent and adult psychiatric care and substance abuse. Meadow Wood Hospital, a 50-bed facility built in 1987, specializes in acute care psychiatric treatment for children and adolescents between the ages of 8 and 19. PsychGroup's three remaining facilities, which Cooper will manage but not acquire, provide a range of specialized treatments for children, adolescents and adults including programs for women, older adults and survivors of psychological trauma as well as alcohol and drug addiction treatments on an impatient, outpatient and continuing care basis. -0- 4/8/92 /NOTE TO EDITOR: Healthcare subsidiaries of The Cooper Companies, Inc. are CooperSurgical, Inc., CooperVision, Inc. and Coopervision Pharmaceuticals, Inc./ /NOTE: Watch for Nu-Med release, which will move shortly. /CONTACT: Richard Jay Coyle, APR of the Cooper Companies, 212-557-2690/ (COO NUMS) CO: Cooper Companies, Inc.; Hospital Group of America, Inc.; Nu-Med, Inc. ST: New York, California IN: HEA SU: TNM
PS -- NY007 -- 6348 04/08/92 14:37 EDT
|Printer friendly Cite/link Email Feedback|
|Date:||Apr 8, 1992|
|Previous Article:||SHEFFIELD INDUSTRIES ACQUIRES SUBSTANTIALLY ALL EQUIPMENT, CERTAIN INVENTORY AND LICENSES TO TRADEMARKS OF LEROI PRINCETON|
|Next Article:||TI-ACER JOINT VENTURE BEGINS SHIPPING ADVANCED SEMICONDUCTORS|