Minnesota providers plan merger. River Region Health Services in Red Wing, Minn., could become part of Fairview Health System, Minneapolis, under a memorandum of understanding approved last week. Delegates from River Region's parent organization, Christian Health Services, voted 24-9 in favor of a merger with a Fairview clinic in Red Wing. The organizations' boards already have approved the deal. Due-diligence reviews are expected to consume the next six months. River Region includes 84-bed St. John's Regional Health Center, a retirement center and a seminary home in Red Wing. Red Wing is roughly 45 miles southeast of Minneapolis. Under the proposal, River Region would merge with Interstate Medical Center, a multispecialty group practice of about 35 physicians. Fairview acquired the clinic with its purchase of University of Minnesota Hospital and Clinics in Minneapolis (March 17, p. 26). Fairview currently includes eight hospitals and about 30 clinics.
GranCare to acquire Ala. company. GranCare, an Atlanta-based long-term-care company, has agreed to buy Northport (Ala.) Health Services for $84 million in a combination of cash, seller financing and GranCare common stock. Northport operates 19 skilled-nursing and assisted-living facilities with more than 2,000 beds in addition to several related ancillary businesses in Alabama. Northport reported 1996 combined revenues of about $100 million. The transaction is expected to close during the second quarter of 1997. GranCare will then operate 140 skilled-nursing, subacute and assisted-living facilities in 15 states, 12 home-care agencies in four states, and 145 specialty programs in acute-care hospitals in 20 states.
Magellan signs deal with British firm. Atlanta-based Magellan Health Services, the nation's largest behavioral healthcare company, said it has reached sale and licensing agreements worth $76 million with London-based Priory Hospitals Group. Magellan said it has signed agreements to sell its two psychiatric hospitals in London and its psychiatric hospital in Nyon, Switzerland, to Priory. In a separate agreement, Magellan, formerly called Charter Medical Corp., will allow Priory to use the "Charter" name at the facilities for seven years and other intellectual and property rights for six months, pending negotiation of a potential franchise relationship. Both deals are expected to close in May.
Two Unison executives step down. Unison HealthCare Corp., a Scottsdale, Ariz.-based long-term-care provider, said it has accepted the resignations of two top executives in the wake of a restatement of its financial results for the nine months ended Sept. 30, 1996. The company said Paul Contris, executive vice president for acquisitions, and Craig Clark, chief financial officer, have resigned. The company said it has reduced its nine-month earnings by $3.6 million, or 93 cents per share, as a result of inaccurate accounting methods discovered during the course of its 1996 audit.
Medical products distributors to merge. Henry Schein has signed a definitive agreement to acquire Micro Bio-Medics in a $117 million deal that is a combination of stock swap and debt relief. The marriage would create a healthcare products distributor with nearly $1 billion in annual sales. Melville, N.Y.-based Henry Schein specializes in direct distribution to dentist and physician offices. Micro Bio-Medics, based in Pelham Manor, N.Y., is a distributor to doctors and health networks. The deal is expected to close by mid-year, subject to shareholder and regulatory approval.
Premier, Urohealth sign $1 billion pact. Premier has entered a five-year, $1 billion purchasing agreement with Urohealth, a Newport Beach, Calif.-based maker of medical devices. Unlike other recent Premier agreements, this deal does not include minimum purchasing requirements and applies only to nonhospital sites, such as outpatient clinics and physician offices. Urological and gynecological product lines are included, but Urohealth's minimally invasive surgery and impotence treatment products are not.