DENVER, June 12, 2000, (PRIMEZONE) -- Coram Healthcare Corporation (OTCBB:CRHE) today announced that it has reached a definitive agreement to sell its Coram Prescription Services (CPS) specialty pharmacy services/pharmacy benefit management unit to newly formed affiliates of GTCR Golder Rauner, LLC and CPS management for $41.3 million. The sale is expected to generate approximately $37.3 million in cash after expenses.
The proceeds will be used to reduce corporate debt, which was approximately $296.6 million at April 30, 2000. The sale is expected to generate an after-tax gain of approximately $18.0 million and increase shareholders' equity by that amount.
"The sale of CPS is part of our strategic effort to focus on our core home infusion services business and to reduce debt and unnecessary cash obligations," said Coram Chairman, President and Chief Executive Officer Daniel D. Crowley. "This will contribute in a small way toward reducing our debt, but it does not obviate the need to continue our efforts to further reduce debt and increase shareholders' equity, as we have discussed in recent press releases and in our SEC filings."
Mr. Crowley continued: "CPS is a good company and we will continue working closely with it in marketing and supplying certain pharmacy services related to our infusion business and our employee benefits plan."
Even though Coram's management believes the transaction will close this summer (the completion of the transaction is subject to customary conditions and third party approvals), there can be no assurances of such closure.
CPS had revenues of $26.2 million in the quarter ended March 31, 2000.
Denver-based Coram Healthcare, through its subsidiaries, is a national leader in providing quality home infusion therapies. Company subsidiaries also provide support for clinical trials, medical product development and medical informatics.
Note: Except for historical information, all other statements in this press release are "forward-looking" within the meaning of the Private Securities Litigation Reform Act of 1995. The Company's actual results may vary materially from these forward-looking statements due to important risk factors including the Company's lack of profitability; uncertainties associated with the outcomes of certain pending legal proceedings; the Company's significant level of outstanding indebtedness; the Company's need to obtain additional financing or equity; uncertainties associated with the dilution that would occur if the Company's existing debt holders exercise their equity conversion rights; the Company's limited liquidity; and the Company's dependence upon the prices paid by third party payors for the Company's services; and certain other factors. Certain risk factors are described in greater detail in the Company's Form 10-K Annual Report and 10-Q Quarterly Report on file with the Securities and Exchange Commission.