Continuing its downsizing strategy, Columbia/HCA Healthcare Corp. last week signed letters of intent to sell 344 home-care sites in 23 states to four companies.
The four transactions are valued at $62 million and represent about 70% of Columbia's home-care business, said Gary Koops, a Columbia spokesman.
Amedisys, a Baton Rouge, La.-based publicly traded provider of alternate-site health services, will purchase 116 Columbia home health sites in six states: Ala-bama, Georgia, Louisiana, North Carolina, Oklahoma and Tennessee. Excluding the proposed acquisitions from Columbia, Amedisys owns 25 home health nursing offices in 11 Southern states.
In another deal, Medshares, a Memphis, Tenn.-based provider and manager of home health agencies, will purchase 198 sites in eight states: Arkansas, California, South Carolina, Texas, Utah and Virginia, as well as certain operations in Indiana and Kentucky.
In a third transaction, home healthcare provider Interim HealthCare, based in Fort Lauderdale, Fla., has agreed to purchase 14 locations in Arizona, Illinois, Nevada and New Mexico.
Finally, an independent group of investors led by George Mandes and Robert Reeves will purchase Columbia home health agencies in Alaska, Idaho, Kansas, Oregon and Wyoming. Mandes and Reeves, former executives with Homecare, a Wallingford, Conn.-based home health company acquired by Wallingford-based Masonicare last year, are working with two venture capital investment firms to buy 16 agencies.
Mandes would not disclose names of the two investment firms.
All the sales are subject to federal antitrust approval.
Owings Mills, Md.-based Integrated Health Services and Melville, N.Y.-based Olsten Health Services had previously expressed interest in Columbia's home-care division. Koops would not disclose whether negotiations with those companies are pending or have failed.
Officials at IHS and Olsten declined comment.
Columbia plans to complete letters of intent for the remainder of its home-care division by the end of the third quarter, Koops said. "Our goal is to divest all of our home care," he said.
Columbia announced plans to sell its home-care operations in August 1997 as part of its strategy to restructure in the wake of a massive federal fraud investigation of the Nashville-based chain.
At that time, Columbia left open options to sell the home-care division to one buyer or piecemeal, Koops said. "As the plan moved forward, (selling piece by piece) became the best route," Koops said. "This was also the best approach to provide continuity of care."
Before the four deals, Columbia Homecare Group, based in Dallas, had 459 locations in more than 30 states. It accounts for $200 million to $400 million, or between 1% to 2%, of Columbia's revenues. The group is a target of the fraud investigation.
Buyers will be indemnified against fines and penalties stemming from the fraud investigations, Koops said.
"We're committed to doing the right thing," he said.