Welsh, Carson, Anderson & Stowe, a New York-based venture capital company, said it has completed a $14.7 million equity investment in EHN Holdings, a Cleveland-based managed-care company. The capital infusion will help Emerald Health Network, a PPO wholly owned by EHN Holdings, expand into the HMO business. The 11-year-old PPO has 270,000 enrollees. Including HMO coverage "will make us more attractive to existing and new customers, (and) enhance our ability to partner with other PPOs that operate in markets with below-average HMO penetration," said Burt Bundgus, EHN Holdings' president and chief executive officer. HMO penetration in the Cleveland market is just 15%. James B. Hoover, a Welsh, Carson general partner, said the HMO offering will significantly accelerate the company's growth in revenues and profits.
Medaphis Corp., Atlanta, said it has signed a definitive agreement to acquire all the capital stock of AdvaCare, a Dallas-based physician billing and practice management company, for $38.2 million of Medaphis common stock. The per-share price is equivalent to $2.36 per AdvaCare share. As part of the deal, Medaphis said it will assume about $69.3 million of AdvaCare's liabilities, obligations and transaction costs. Under the merger agreement, each share of AdvaCare common stock will be exchanged for Medaphis common stock. In addition, all AdvaCare options and warrants will be converted into Medaphis options and warrants. The transaction is expected to close by Nov. 30. Medaphis provides business management services to hospitals and physicians.
Citicorp Equipment Finance and Leasing is offering a new equipment finance management program called CitiCare. Although the Citicorp division has offered such projects in the past, the new program is tailored to the needs of healthcare providers. Through CitiCare, providers may finance medical technology without tying up their own capital. Some 23 leasing options and other financial products are available on a floating- and fixed-rate basis. Providers may be eligible for $5 million in financing or as much as $10 million for highly creditworthy providers. Citicorp provides equipment financing and leasing services to nearly 1,000 providers, mostly hospitals.
Omega Healthcare Investors, Ann Arbor, Mich., has agreed to lease six nursing homes with a total of 629 beds to Evergreen Healthcare, a long-term-care provider with headquarters in Carmel, Ind. Omega acquired the facilities from Sterling Health Care Centers of Ashland, Ky., in July. The facilities are located in eastern Kentucky, Ohio and West Virginia. The 10-year lease provides initial rents of $2.4 million. Evergreen also has an option to lease four other facilities under construction or major renovation by affiliates of Sterling. Evergreen operates 80 facilities in 11 states; Omega has investments in 93 healthcare facilities in 17 states.