HealthSouth Corp., the nation's largest provider of rehabilitation services, last week purchased NovaCare's rehabilitation hospital division for $215 million in cash.
The transaction continued Birmingham, Ala.-based HealthSouth's rampant pace of acquiring mid-sized regional facilities to complement its rehabilitation services business.
NovaCare is a King of Prussia, Pa.-based provider of alternate-site healthcare. Its rehabilitation hospital division consists of 11 hospitals in seven states and 12 additional facili-ties nationwide.
The deal, which remains subject to federal antitrust clearance, would give HealthSouth nearly 450 rehabilitation facilities, 67 of which are freestanding hospitals. It's expected to be completed during the second quarter of 1995.
"This complements our existing hospitals by adding inpatient operations in four additional states," said Richard Scrushy, HealthSouth's chairman, president and chief executive officer.
It also marks the third time in the past six months that HealthSouth has purchased an alternate-site healthcare business. In January, the company purchased Surgical Health Corp., an Atlanta-based provider of outpatient surgery, for $155 million in stock (Jan. 30, p. 4).
Last September, HealthSouth bought its rival chain, Birmingham, Ala.-based ReLife, for $180 million in stock. But the Federal Trade Commission investigated that deal for possible violations of antitrust laws and only approved it after HealthSouth agreed to sell off rehabilitation facilities in Birmingham, Ala.; Charleston, S.C.; and Nashville, Tenn.
The proposed consent agreement ended the FTC's four-month probe-the first to target rehabilitation hospitals.