The four-way, $550 million Coram merger involving T2, Curaflex Health Services, HealthInfusion and Medisys has been temporarily delayed after the Securities and Exchange Commission requested additional information from the home-care companies about the deal.
Company executives last week confirmed the SEC request. But they said the inquiry isn't unusual, considering the size of the deal, and isn't expected to dramatically delay the transaction.
"It's a large deal with lots of people and lots of lawyers," said healthcare attorney Kent Clayton, whose Newport Beach, Calif.-based firm of Brobeck, Phleger & Harrison is representing HealthInfusion in the merger. "It's logistics more than anything else." He declined to comment on the specifics of the SEC request, as did SEC officials.
The four companies announced their $550 million merger plan in February, creating Coram Healthcare Corp., the second-largest home infusion company in the nation. However, more than two months after the initial announcement, none of the companies have issued a proxy report on the deal, prompting speculation that the merger was going to fall through.
In addition, there were reports that one of the four companies-Miami-based HealthInfusion-had considered dropping out of the deal. However, both Mr. Clayton and HealthInfusion executives denied the reports and said the company will continue to pursue the merger.
Meanwhile, the SEC continues to investigate the events behind last summer's restatement of earnings at T2 Medical. Earlier this month, MODERN HEALTHCARE reported that several current and former T2 executives-including Chairman Thomas Haire and former T2 President and Chief Executive Officer Joseph Allegra, M.D.-had been subpoenaed by the SEC regarding its investigation of the company (May 2, p. 22).
An internal conflict involving Mr. Haire and Dr. Allegra sparked several incidents, including the restatement of the company's first- and second-quarter earnings. Those events ultimately prevented Dr. Allegra's investment group from buying the company for $720 million, or $18 per share, last August.
Dr. Allegra resigned from the company in September. Five months later, T2 announced it had agreed to be part of Coram Healthcare Corp.
The Coram merger cleared the Federal Trade Commission antitrust process in April and now awaits SEC clearance, which executives said they expect to receive by the end of this month. Shareholders will vote on the merger in late June or early July, executives said.