A dispute over the termination of a planned merger between Apria Healthcare Group, a home-care company, and Vitas Healthcare Corp., a hospice provider, came to an abrupt conclusion when the companies signed a settlement agreement last week.
"We were eager to put this all behind us," said Mark Cohen, vice president for corporate communications at Miami-based Vitas.
Under the settlement, Costa Mesa, Calif.-based Apria agreed to pay Vitas $4 million. Both companies also agreed not to pursue any other claims, liabilities or obligations related to the merger.
In mid-November, Apria announced it had exercised its rights to unilaterally terminate the merger. Vitas responded with threats of litigation based on its view that Apria didn't have sufficient grounds to call off the $212 million deal (Nov. 18, p. 18).
"We spent six months working to make this transaction a success," Cohen said. "We were going down one road with Apria and had to put other business opportunities on hold."
Cohen said Vitas preferred a settlement to the prospect of lengthy and costly rounds of litigation.
"We are satisfied with the result and pleased that the book is closed on this matter," he said.
As a result of the settlement, Apria said it expects a fourth-quarter loss of $7 million to $10 million.