A New York investment firm once responsible for the turnaround of a hospital company will take a similar crack at troubled Apria Healthcare Group, a $1.2 billion home-care firm.
Joseph Littlejohn & Levy, which helped make OrNda HealthCorp a desirable acquisition target of Tenet Healthcare Corp., will invest $242 million in Apria as part of an effort to recapitalize the company.
"We've had a strong track record in healthcare, and we understand how it works," said Tim Brien, principal at JLL.
Apria's nine-member board voted unanimously last week in favor of the recapitalization plan, rejecting yet another acquisition offer from New York-based Transworld HealthCare, which is run by Timothy Aitken, Apria's former vice chairman.
Apria, which provides home-care services through 350 locations in 50 states, has been under pressure from investors concerned about financial performance.
Apria will disclose an annual loss of between $2.20 and $2.40 per share when it reports its 1997 annual and fourth-quarter results later this month. Officials won't disclose the projected dollar losses. The company has been evaluating offers from potential suitors since June 1997.
The board and investors last month forced the resignation of Jeremy Jones as chairman and chief executive officer. He was replaced on an interim basis by Lawrence Higby, president and chief operating officer. However, a search had been on for a permanent CEO. JLL officials wouldn't comment on that process.
For its $242 million, JLL will own 26% of Apria and control three board seats.
JLL's 1991 recapitalization of OrNda led to the company increasing five times in value by the time it was acquired last year by Tenet for $3.1 billion.
"After this transaction, Apria's balance sheet will be solid," said Paul Levy, a JLL partner. "Once operations are back on a growth track, we expect the company to explore additional growth through strategic acquisitions," Levy said.