HealthSouth Corp. managed to squeeze in one last deal before the end of 1995. The Birmingham, Ala.-based company agreed to buy AdvantageHealth Corp. for $325 million worth of stock.
The deal is the fourth HealthSouth acquisition announcement since August. The company also closed two other deals earlier in 1995.
AdvantageHealth, based in Woburn, Mass., is the largest post-acute rehabilitation network in the Northeast. It operates about 150 rehabilitation hospitals and clinics in 10 Northeastern states and Florida. Both companies' boards have approved the deal, which is to be a tax-free pooling of interests.
If approved by AdvantageHealth shareholders, the combination will increase HealthSouth's national presence to 44 states and 850 facilities.
"We needed that network to be able to serve our customers nationwide," said Richard M. Scrushy, chairman and chief executive officer of HealthSouth.
The two companies put the deal together quickly, Scrushy said. Their executives met for the first time on Dec. 15 and announced the agreement on Dec. 18.
Like HealthSouth, AdvantageHealth has demonstrated an expansion-minded strategy. In mid-December it announced two acquisitions.
First, it said it would buy the assets of Affiliated Rehabilitation, a Ludlow, Mass.-based provider of inpatient and outpatient rehabilitation services in western Massachusetts.
Second, it signed an agreement to purchase 202-bed Harmarville Rehabilitation Clinic in Pittsburgh, a deal that includes seven outpatient centers. AdvantageHealth said the addition of Harmarville and its satellites will add approximately $40 million to its net revenues.
The company also acquired a 75-bed subacute facility in Lowell, Mass., in September.
Raymond J. Dunn, AdvantageHealth's chairman and CEO, will join HealthSouth's board when the deal is completed, probably in the first quarter of 1996.
HealthSouth's merger with Nashville, Tenn.-based Surgical Care Affiliates, which was announced last October, will be voted on by stockholders of both companies Jan. 17.