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COLUMBIA HOSPITAL CORPORATION AND GALEN HEALTH CARE ANNOUNCE PLANNED MERGER

 FORT WORTH, Texas, and LOUISVILLE, Ky., June 10 /PRNewswire/ -- In a merger creating one of the nation's largest healthcare providers, Columbia Hospital Corporation (NASDAQ: CHOS) and Galen Health Care, Inc. (NYSE: GHC) today jointly announced the signing of a definitive agreement to merge in a tax free stock-for-stock transaction.
 Under the terms of the merger agreement unanimously approved by the boards of both companies, Galen shareholders would receive 0.775 share of Columbia common stock in exchange for each Galen share held, resulting in outstanding Columbia common shares of approximately 150 million. Concurrent with the merger, Columbia will change its name to Columbia Healthcare Corporation, in recognition of its strategy to provide a comprehensive array of healthcare services beyond hospital care. It is anticipated that the proposed merger will be tax free to Galen shareholders and accounted for as a pooling-of-interests. The combined company will apply for listing on the New York Stock Exchange.
 The new company will own and operate 99 hospitals with over 22,000 licensed beds located in 19 states and two foreign countries, with a significant presence in over 20 metropolitan markets including: Miami/Fort Lauderdale, Houston, San Antonio, Corpus Christi, El Paso, Louisville, Phoenix, Denver, Chicago, Tampa/St. Petersburg, Las Vegas, Kansas City and Dallas. Combined annual revenues will exceed $5 billion, while assets will be over $4.5 billion and shareholders' equity will approximate $1.6 billion.
 The companies believe that the proposed merger increases shareholder value through anticipated growth in markets common to both companies and the development of comprehensive integrated healthcare delivery networks with physicians and other healthcare providers in certain Galen markets. In addition, the companies anticipate annual savings of over $30 million resulting from Galen's national purchasing contracts and credit access, and the elimination of duplicative administrative costs.
 In a joint statement issued by Carl F. Pollard, Galen Chairman and Chief Executive Officer, and Richard L. Scott, Columbia Chairman and Chief Executive Officer, the two executives noted that the proposed merger signifies "a combination of Columbia's successful growth and acquisition strategy with Galen's proven cost efficiencies and financial strength. These synergies, along with the experienced management of both companies, should provide a competitive advantage to our new company in the delivery of high quality, comprehensive healthcare services, and should position our hospitals for future growth and expansion in a rapidly changing healthcare system. We are excited about the opportunities that this merger creates for our shareholders, the communities which we serve, and our medical staffs and employees."
 Commenting on the impact on Columbia's income statement, Mr. Scott pointed out that the "transaction should add to earnings per share in both 1993 and 1994." Mr. Pollard commented that "the new company's balance sheet will be significantly stronger than Columbia's current one. Interest coverage ratios should improve, and debt to debt plus equity should decline from 65% to approximately 50%." The new company is expected to receive investment grade credit ratings from the rating agencies.
 If the merger is consummated, it is expected that Mr. Pollard will become the Chairman of the Board of the new company and Mr. Scott will become President and Chief Executive Officer, responsible for day-to-day operations. The role of Chief Operating Officer will be shared by David T. Vandewater, Columbia's President and Chief Operating Officer, and Galen's President and Chief Operating Officer, James D. Bohanon. The combined entity's board of directors will consist of six current Galen directors, including Mr. Pollard, and five Columbia directors, including Mr. Scott. The new company will be based in Louisville, Kentucky.
 The boards of both Columbia and Galen expect that the new company board will initiate the payment of a regular quarterly dividend subsequent to the consummation of the merger.
 The proposed merger is subject to various conditions, including receipt of a tax ruling from the Internal Revenue Service or counsel regarding the tax consequences of the transaction, confirmation that the transaction qualifies as a pooling-of-interests and approval by shareholders of both companies. Shareholder meetings to vote on the transaction are anticipated for September 1993. If approved, the merger should be completed shortly thereafter.
 Galen has agreed to pay Columbia a break-up fee under certain circumstances if the transaction is not completed.
 Goldman, Sachs & Co. is serving as financial adviser to Galen and has rendered a fairness opinion to Galen's board of directors with respect to the proposed combination. Stephens, Inc. is serving in the same capacity for Columbia and has rendered a separate fairness opinion to Columbia's board of directors.
 Galen, based in Louisville, Kentucky, owns and operates 73 acute- care hospitals containing 16,485 licensed beds located in 19 states and two foreign countries, and Columbia, based in Fort Worth, Texas, owns and operates 26 hospitals with 5,651 licensed beds located primarily in Florida and Texas.
 -0- 6/10/93
 /CONTACT: (Investors) Lee A. Wood, 817-870-5900, or Susan A. Noonan, 212-979-9180, of Columbia Hospital Corp., or Richard A. Lechleiter of Galen Health Care, 502-572-2143; (Media) David Margulies, 214-385-8282, or Anthony J. Russo, 212-979-9180, both of Columbia Hospital Corp., or Lindy B. Richardson of Galen Health Care, 502-572-2153/
 (CHOS GHC)


CO: Columbia Hospital Corporation; Galen Health Care, Inc. ST: Texas, Kentucky IN: HEA SU: TNM

CM -- CH007 -- 0803 06/10/93 16:42 EST
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Publication:PR Newswire
Date:Jun 10, 1993
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