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Integrated Health buys Coram for $280 million in stock

Integrated Health Services Inc. said Monday it agreed to buy Coram Healthcare for $280 million in stock to create one of the country’s largest providers of post-operative and in-home health care companies.

Integrated Health said it would pay Coram stockholders $5.50 worth of Integrated stock in return for each Coram share.

The total value of the transaction, including the assumptions of Coram’s debt and other financial obligations, was about $655 million, Integrated said.

Denver-based Coram, which provides home intravenous therapy, has annual revenues of $532 million and 112 locations in 43 states.

When the purchase is completed, Integrated Health Services will operate more than 700 home health branch locations in 44 states and have more than $1.2 billion in home health revenue.

Owings Mills, Md.-based Integrated Health Services offers post-acute medical and rehabilitative services.

The consolidated company will be the nation’s second-largest home health company and the largest post-acute care company offering a broad spectrum of services, including home nursing services, home infusion services, subacute care, inpatient and outpatient rehabilitation services, skilled nursing facility care, hospice and diagnostic services.

Don Amaral, CEO and President of Coram, signed a one-year agreement to remain with IHS after the merger as CEO of Coram and will continue to run Coram’s operations.

“Our strategy remains the development of post-acute care networks which provide care to patients throughout their episode of treatment and to focus on the managed care payor,” said Robert N. Elkins, chairman of Integrated Health.

“Home health care is a critical component of our network because of its cost-effectiveness and the trend for earlier discharge of patients from hospitals, subacute care units and skilled nursing facilities. Home care complements our post-acute network strategy by providing managed care companies the opportunity for one-stop-shopping for home health and other post-acute services.”

The transaction, which has been unanimously approved by the boards of each company, is subject to approval by various parties and is expected to close during the first quarter of 1997.

Coram’s stock was unchanged at $5 a share and Integrated Health was down 50 cents at $25.25 a share in morning trading on the New York Stock Exchange.

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