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This article was originally published in The Gray Sheet

Executive Summary

CURAFLEX/HEALTHINFUSION/MEDISYS MERGER WOULD CREATE THIRD LARGEST home infusion company based on revenues. The three companies signed a definitive merger agreement Dec. 1. Combined revenues of the firms for the twelve months ended Sept. 30 were approximately $184.3 mil. The companies noted that they would become the second largest direct provider of home infusion therapy services behind Caremark. Option Care, which operates through franchises, is the second largest provider overall. The new company will have "approximately 74 regional centers and seven disease-specific outpatient facilities located throughout the United States," the companies said. In addition, the companies maintain that the merged entity will be the leading home infusion service provider "in more than a dozen major metropolitan markets" including Miami, Tampa, Boston, Chicago, Phoenix, St. Louis, Dallas, Houston, Philadelphia, Kansas City, Omaha, Southern California and Columbia, Maryland. Pursuant to the agreement, "all shares of common stock of Curaflex, HealthInfusion, and Medisys issued and outstanding prior to the merger will be exchanged for shares of common stack of a newly-formed company," which is not yet named. Curaflex shareholders will own 39.67% of the new company, HealthInfusion shareholders will own 37.67% and Medisys shareholders 22.67%, the companies said. Curaflex Chairman, President and CEO Charles Laverty will become the new company's chairman and CEO. HealthInfusion President and CEO Miles Gilman will take on the roles of vice chairman and president. Medisys CEO William Brummond will assume the executive VP post. Ontario, California-based Curaflex calls itself "a national provider of comprehensive infusion therapy and related services to patients in the home and alternate site environments." The firm has 32 regional centers, four "satellite facilities" and seven "disease-specific outpatient centers focusing on the treatment of complex long-term diseases." Curaflex also operates a national prescription drug benefit program. Miami-based HealthInfusion "provides home infusion therapy services and 26 states from 34 regional facilities." Minneapolis-based Medisys has home infusion centers in nine Western and Midwestern states. It also "provides comprehensive pharmacy services to long-term care and retirement communities" including "prescription dispensing, pharmaceutical consulting, IV therapy, enteral therapy and medical supplies," the firm said. Laverty described the deal as "a proactive response to the current healthcare environment, where operating efficiencies and the ability to withstand pricing pressures will be the key factors driving corporate profitability." The merger would cap a string of acquisitions by each of the three firms: the companies said they have acquired over 35 other firms in the past several years. The home infusion market has been growing as insurers and hospitals work to reduce hospital stays. The market could be further helped by passage of the Clinton Administration health reform plan, which mandates coverage of home care. The merger agreement is subject to shareholder approval at the three companies, Hart Scott Rodino antitrust clearance, and acceptance of "pooling-of-interest" status. The agreement is "expected to be completed by the end of the first quarter of 1994," the companies said. Each company has agreed to pay up to $3 mil. if it opts out of the deal in favor of another acquisition proposal.

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