Integrated to pay $29 million for Fla. IntegraCare


Integrated Health Services Inc. yesterday continued its drive into businesses that supplement its chain of subacute-care facilities, announcing it will spend $29 million to buy a Florida rehabilitation services company.

The definitive agreement to buy IntegraCare Inc. is part of Owings Mills-based IHS' move to contain costs by taking control of companies that provide services Integrated uses in its facilities. Subacute-care centers are designed to capture business by serving patients who are too sick to stay at home but who don't need the full range of services found in a more expensive acute-care hospital.

Susan Betso, who follows Integrated for Legg Mason Inc. in Baltimore, said the move will make Integrated more attractive to managed-care organizations.

But IntegraCare, which earned $1.6 million last year on sales of $29 million, is so much smaller than Integrated that the deal is not expected to change the larger company's short-term outlook, she said.

"It is not a big deal for IHS," Ms. Betso said.

Integrated shares fell 25 cents on the day, to close at $34.25. In the deal, which the companies tentatively agreed to in February, IntegraCare shareholders will get $9.50 worth of Integrated stock for each of their shares, which closed yesterday at $9, up $1. The transaction is expected to be completed by June.

Ms. Betso said IntegraCare, which provides physical, occupational and speech therapy, was under pressure because a nursing home company that was one of its biggest customers was phasing out therapy contractors in favor of doing the work itself.

The deal is one of several Integrated has made in recent months to purchase service companies.

In early December, Integrated announced it would buy Primedica Hospital Services, the nation's largest provider of respiratory therapy and cardiopulmonary services to nursing homes and acute-care hospitals, from Medserv Corp. of Marietta, Ga. In November, Integrated said it would add five more support service companies that provide institutional pharmacy, rehabilitation and home-care services.

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