The Federal Trade Commission is investigating HealthSouth Corp.'s proposed purchase of NovaCare's rehabilitation hospital division, company officials said.
"The FTC's request is limited to information about the Richmond, Va., market," NovaCare said in a March 28 press release. "We will provide the requested information and expect the Antitrust
transaction to close within four to six weeks after the FTC review."
HealthSouth owns one inpatient rehabilitation unit in Richmond, while NovaCare operates a freestanding rehabilitation hospital there.
Both companies filed pre-merger notification documents in late February and received the FTC's second request for information in late March, said William Horton, HealthSouth's vice president of legal services.
In February, HealthSouth bought NovaCare's rehabilitation hospital division for $215 million in cash (Feb. 13, p. 36). The deal would give the Birmingham, Ala.-based rehab hospital chain nearly 450 rehabilitation facilities, 67 of which are freestanding hospitals.
NovaCare is a King of Prussia, Pa.-based provider of alternate-site healthcare. Its rehabilitation hospital division comprises 11 hospitals in seven states and 12 additional facilities nationwide.
This marks the second time in six months that the federal government has intervened in one of HealthSouth's proposed acquisitions. Last October the FTC investigated HealthSouth's $190 million purchase of Birmingham, Ala.-based ReLife for possible violations of antitrust laws and only approved it after HealthSouth agreed to sell 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.