Ramsay Health Care, a New Orleans-based psychiatric hospital chain, last week decided to spin off the company's managed-care operations into a separately traded company.
The move had been expected since the company divided responsibilities for the two businesses in September (Oct. 3, p. 17).
Last week, Ramsay said it would distribute holdings of common stock in Ramsay Managed Care in the form of a dividend, with the new shares valued at $1 each. The division operates managed behavioral health programs covering 700,000 enrollees, and had profits of $68,000 on revenues of $5.9 million for the fiscal year ended June 30.
Afterward, Ramsay Health Care stock will continue to be traded over the counter. The company anticipates that Ramsay Managed Care will be quoted on the over-the-counter bulletin board.
The split will allow each company to "pursue the development and growth strategies best suited for their individual goals" as well as enhance shareholder value, said Gregory Browne, Ramsay's chief executive officer.
Three Ramsay executives and a corporate affiliate of Paul Ramsay, the company's chairman, will capitalize the spinoff through a $5.8 million private placement.