Birmingham, Ala.-based HealthSouth Corp. agreed to acquire ReadiCare, an occupational health services provider in Sunnyvale, Calif., in a $70 million tax-free pooling of interests.
ReadiCare operates 37 sites in California and Washington and reported fiscal 1996 revenues of $36.2 million.
Richard Scrushy, chairman and chief executive officer of HealthSouth, said the purchase will complement his company's existing facilities in those states and provide an entrance into the $60 billion workers' compensation market.
HealthSouth currently provides outpatient and inpatient rehabilitation services at more than 900 sites throughout the country. Its revenues were $1.6 billion in 1995.
Under the agreement, ReadiCare stockholders will receive 0.2425 shares of HealthSouth common stock for each share of ReadiCare stock.
If HealthSouth's average stock price rises above $38.30 per share or falls below $30.60 during the measuring period, the exchange ratio will be adjusted. The agreement also provides for the payment of an $8 million break-up fee by ReadiCare if it backs out of the deal.
The transaction is expected to close in the fourth quarter of 1996.