NOVACARE AND ORTHOPEDIC SERVICES AGREE TO MERGE
NOVACARE AND ORTHOPEDIC SERVICES AGREE TO MERGE VALLEY FORGE, Pa., Nov. 18 /PRNewswire/ -- NovaCare, Inc.
(NYSE: NOV) and Orthopedic Services, Inc. (NASDAQ: OSI) jointly announced today the execution of a definitive agreement and plan of merger pursuant to which Orthopedic Services will merge with and become a wholly owned subsidiary of NovaCare. Pursuant to the merger, each outstanding share of common stock of Orthopedic Services will be converted into 1.3 shares of NovaCare common stock. The merger has been approved by the boards of directors of NovaCare and Orthopedic Services following recommendation by the special committee of each company's board.
The merger is subject to the approval of the holders of 2/3 of the NovaCare common stock (excluding shares beneficially owned by John Foster) and the holders of a majority of the Orthopedic Services common stock voting on the transaction (other than shares beneficially owned by John Foster). The merger is also subject to various other conditions including the receipt of opinions that the transaction will be treated as a pooling of interests for accounting purposes and a tax-free reorganization for federal income tax purposes and the expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Subject to satisfaction of these conditions, it is expected that the merger will be consummated in early 1992. John H. Foster, chairman and chief executive officer of both NovaCare and Orthopedic Services, stated that "Driven by a desire to improve patient care, enhance financial performance, and reduce reimbursement risk, the rehabilitation industry will continue to undergo dramatic consolidation. NovaCare will lead the industry in that consolidation. The merger with OSI is another important step in that process." C. Arnold Renschler M.D., president and chief operating officer of NovaCare stated that, "The merger with Orthopedic Services enables us to further leverage our considerable human resources, training, systems and regulatory affairs expertise. The transaction also enables NovaCare to broaden its markets to orthotic and prosthetic patients currently served by independent providers at our rehab hospitals and customers' nursing homes. Moreover, NovaCare's Medicare dependence will decline from approximately 76 percent of revenues to 63 percent of revenues. Jeffrey S. Levitt, president and chief operating officer of Orthopedic Services, commented that, "Strategically, the merger will enhance our development by expanding the support systems needed to achieve the next level of growth. NovaCare's capabilities, for example, in human resources and regulatory affairs significantly augment our current resources. We are also excited about the prospects for internal growth derived from NovaCare's nursing home customers and rehabilitation hospital patients." NovaCare, Inc. is a leading national provider of contract rehabilitation services to healthcare institutions, offering speech- language pathology, occupational therapy and physical therapy to patients experiencing physical disability. NovaCare also operates seven comprehensive medical rehabilitation hospitals, one hospital-based rehabilitation unit and six community-based transitional care programs. Orthopedic Services is the largest provider in the United States of patient care services in the orthotic and prosthetic rehabilitation segment of the healthcare industry. Orthotic rehabilitation involves the design, fabrication and fitting of custom-made braces and support devices. Prosthetic rehabilitation involves the fabrication and fitting of custom-made artificial limbs. -0- 11/18/91 /CONTACT: Timothy E. Foster, senior vice president-finance and administration of NovaCare, 215-631-9300; or Jeffrey S. Levitt, president and chief operating officer of Orthopedic Services, 215-631-9900; or Susan A. Noonan or Anthony J. Russo of Noonan/Russo Communications, 212-979-9180, for NovaCare/ (NOV OSI) CO: NovaCare, Inc.; Orthopedic Services, Inc. ST: Pennsylvania IN: HEA SU: TNM FC-TK -- NY009 -- 1233 11/18/91 08:36 EST
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|Date:||Nov 18, 1991|
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