Healthways, Nashville, the nation's largest disease-management vendor, terminated its planned $307.5 million acquisition of rival LifeMasters Supported SelfCare, South San Francisco, after the companies discovered that LifeMasters' financial results were not as high as previously reported. The data-reporting error, made by a third-party accountant, was unknown to LifeMasters at the time the companies agreed to merge in May. Correcting the error "materially" reduced previous revenue and the financial forecasts that Healthways had used in its merger valuation, the companies said in a joint news release. They said they weren't able to agree on a new acquisition price, and no further discussions are planned. The companies disclosed the reporting error in late August. The deal had been expected to close on Sept. 1.
Healthways calls off LifeMasters acquisition
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