After spending nine months looking for a partner, Apria Healthcare Group might go it alone after taking its latest suitor to court.
Apria last week sued the New York-based investment firm Joseph Littlejohn & Levy, accusing it of backing out of its deal to recapitalize the Costa Mesa, Calif.-based home-care company.
The lawsuit, filed in California Superior Court in Orange County, ends negotiations between the parties, which had signed a letter of intent calling for JLL to invest $242 million in Apria. The suit seeks undisclosed damages.
On March 25, the day after it filed the suit, Apria's stock dropped $2.31, or 21%, to $8.88 per share.
"It's unlikely that we will launch another full-scale effort with another investment banker," said Sheree Aronson, Apria's director of investor relations. "The company will seek some other alternative or get back to business and proceed on our own."
Apria hired investment banker Goldman Sachs of New York last July to help it find a strategic partner and rebound financially. Apria lost $272.6 million, or $5.30 per share, on revenues of $1.2 billion last year.
The company's poor financial performance led board members and investors to press for the resignation of Jeremy Jones as chairman and chief executive officer in January. He was replaced on an interim basis by Lawrence Higby, president and chief operating officer.
Higby is a candidate for the permanent CEO job. "He's still considered interim, but he is a candidate (the board members) are considering for the job," Aronson said.
Apria's nine-member board is scheduled to meet this week to discuss its options.
JLL said the suit is without merit. It would not say when it plans to respond to the suit. No trial date has been scheduled.
The disagreement between Apria and JLL centers on the investment group's demand that Apria meet certain undisclosed financial performance conditions, the lawsuit states. Apria said such conditions were not a part of the recapitalization plan.
Apria provides home-care services through 350 locations nationwide.