The nation's second-largest network of outpatient rehabilitation clinics is seeking a buyer so that its owner can pay its debts and quietly go out of business.
NovaCare said last week that it's selling the rest of its businesses, including 623 physical and occupational therapy sites in 31 states, to pay off $175 million in subordinated debt due January 2000.
Once a major provider of contract rehabilitation services to nursing homes, the King of Prussia, Pa.-based company gave that division away in May after demand for skilled-nursing facilities dropped sharply in the wake of Medicare's new prospective payment system.
In July, NovaCare sold its orthotics and prosthetics business for $455 million to retire its bank debt.
"It's a new beginning for the outpatient clinics," said Susan Campbell, vice president of investor relations. She said she expects the sites to be sold as a single package to the highest bidder. "We want to continue to grow our business and strengthen our market share, and we can do that if we have a new partner with capital."
Under its restructuring plan, subject to shareholder approval, NovaCare will also sell its 67% interest in Norristown, Pa.-based NovaCare Employee Services.
The company expects to liquidate by December 2000, unless its board secures the shareholder approval to invest the proceeds of its sales in another business.