The reconfiguration of Diversicare into a company devoted solely to home care continued last week after the company announced the sale of its nursing home management subsidiary, Diversicare Management Services.
The subsidiary was transferred to a newly formed company run by Diversi- care President and Chief Executive Officer Charles Birkett, M.D.
The new company, called Advocat, plans to raise from $57 million to $68 million through an initial public offering of 5.25 million shares of common stock at a price of $11 to $13 per share.
NatWest Securities, J.C. Bradford & Co. and Raymond James & Associates are the underwriters for the offering.
The registration statement for the IPO has been filed with the Securities and Exchange Commission, but it hasn't yet become effective.
As part of the deal, Diversicare and Counsel Corp., owners of 70% of Diversicare, will transfer all management and leasehold agreements to Advocat in exchange for an undetermined amount of Advocat stock.
Currently, Diversicare Management Services manages 53 nursing homes with 6,118 beds and 18 retirement centers in the United States and Canada.
In January, Diversicare announced that Dr. Birkett would leave the company to become Advocat's chairman and CEO (Jan. 24, p. 14). Edward Wissing, president and chief executive officer of Diversicare's home-care subsidiary, will become president and chief executive officer of Diversicare, whose name will change to American HomePatient, the current name of the subsidiary.