Hoechst Marion Roussel has reached a definitive agreement to sell Rugby Group, its generic drug subsidiary, to Watson Pharmaceuticals, Corona, Calif. Full financial terms weren't disclosed, but the agreement calls for Watson to make an initial payment of up to $70 million and subsequent payments tied to future operating results, according to the companies. As part of the pact, Hoechst would manufacture various generic products exclusively for Watson. Hoechst's divestiture of Rugby would mark its exit from the manufacture and sale of generic drugs. "Direct participation in the generic drug business is not part of our core business strategy," says Peter W. Ladell, chief operating officer of Hoechst Marion Roussel and president of the company's North American business, based in Kansas City, Mo. The deal, expected to close by year-end, is subject to regulatory and legal conditions.
AmeriPath, a physician practice management company that provides anatomical pathology services, said it plans to sell 5 million shares of common stock at $13 to $15 per share. A registration statement for the initial public offering has been filed with the Securities and Exchange Commission. Donaldson, Lufkin & Jenrette, Morgan Stanley Dean Witter, Piper Jaffray and Smith Barney are managing the offering. AmeriPath, based in Riviera Beach, Fla., operates in five states and provides medical services through outpatient pathology laboratories, hospital inpatient laboratories and outpatient surgery centers. The company's proposed NASDAQ symbol is PATH.
Raytel Corp., a San Mateo, Calif.-based operator of cardiovascular diagnostic facilities in eight states, has acquired New Orleans-based Cardiovascular Ventures for $21.6 million in cash, stock and notes. Cardiovascular Ventures, with revenues of $24 million for its fiscal year ended June 30, operates eight diagnostic facilities in Florida, Louisiana, Maryland and Texas, including a combined diagnostic and medical practice in Port St. Lucie, Fla., with 18 physicians. The deal is expected to boost Raytel's revenues by about 30%.
General Electric Medical Systems, Milwaukee, has acquired the high-field magnetic resonance imaging business of Advanced NMR Systems, Wilmington, Mass., and a 20% stake in the company for $5.1 million. GE says it will continue to manufacture, sell and service the MRI systems developed by the two companies under a previous collaboration.
Moody's Investors Service has lifted its outlook on the Baa1 underlying rating of Samaritan Health System's $328 million of insured debt. The move to stable from uncertain reflects the New York-based rating agency's belief that the six-hospital Phoenix-based system will meet its budgeted net income of $23 million in 1997. In the first six months of this year, the system posted net income of $17 million, 50% ahead of budget. Moody's also noted a "slight improvement" in Samaritan's liquidity to 50 days' cash from 39 days in the same period in 1996.