Salick Health Care Approves Merger with Zeneca Group PLC

Strategic Insights -

Salick Health Care Inc., a leading provider of diagnosis and treatment to patients with catastrophic illness, announced that its stockholders voted to approve its merger agreement with Zeneca Group PLC, a leading international bioscience and pharmaceutical company. The merger, consummated following the meeting, sees Salick Health Care issuing 50% of its fully diluted common stock to Zeneca in exchange for cash and other considerations.

Under the terms of the merger, each share of Salick Health Care common stock is converted into the right to receive $18.875 cash, one-half share of callable puttable common stock, and a distribution of $0.625 per share. The newly issued callable puttable common stock carries a right for shareholders to put the stock to Salick and an obligation on Zeneca to fund the purchase at 2.5 years after closing at a price of $42 per share. Assuming the callable puttable common stock is called or put in its entirety 2.5 years from the closing, the total consideration paid to Salick Health Care stockholders in cash will aggregate between $440 million and $480 million.

The merger has led to changes in Salick Health Care's Board of Directors, with three new members being nominated by Zeneca, bringing the total number of directors to 10. Dr. Bernard Salick, Leslie F. Bell, Michael T. Fiore, Barbara Bromley-Williams, and Dr. Thomas Mintz will continue in office. The Company's current management team will remain in place. Salick Health Care operates 10 Comprehensive Cancer Centers across the U.S. and nine outpatient dialysis centers in Southern California, providing inpatient dialysis services at 21 hospitals.

Key Takeaways:

  • Salick Health Care Inc. approved a merger agreement with Zeneca Group PLC at its annual meeting on April 13.
  • Upon consummation of the merger, Salick Health Care will issue 50% of its fully diluted common stock to Zeneca in exchange for cash and other considerations.
  • The merger sees each share of Salick Health Care common stock converted into $18.875 cash, one-half share of callable puttable common stock, and a distribution of $0.625 per share.
  • The callable puttable common stock carries a right for shareholders to put the stock to Salick and an obligation on Zeneca to fund the purchase at 2.5 years after closing at a price of $42 per share.
  • The total consideration paid to Salick Health Care stockholders in cash is expected to aggregate between $440 million and $480 million, assuming the callable puttable common stock is called or put in its entirety 2.5 years from the closing.
  • The merger has led to changes in Salick Health Care's Board of Directors, with three new members being nominated by Zeneca.
  • Dr. Bernard Salick, Leslie F. Bell, Michael T. Fiore, Barbara Bromley-Williams, and Dr. Thomas Mintz will continue in office, with the Company's current management team remaining in place.

Statistics:

  • $18.875: the cash amount paid per share of Salick Health Care common stock in the merger.
  • $0.625: the distribution amount per share payable in two equal installments of $0.3125 180 and 360 days from April 13.
  • 2.5 years: the time period after which the callable puttable common stock is expected to be called or put, with Zeneca obligated to fund the purchase at $42 per share.
  • $440 million – $480 million: the total consideration paid to Salick Health Care stockholders in cash, assuming the callable puttable common stock is called or put in its entirety 2.5 years from the closing.
  • 10: the number of Comprehensive Cancer Centers operated by Salick Health Care across the U.S.
  • 9: the number of outpatient dialysis centers operated by Salick Health Care in Southern California.
  • 21: the number of hospitals providing inpatient dialysis services through Salick Health Care.

Sources:

  • "Salick Health Care Announces Merger Agreement with Zeneca Group PLC." PRNewswire, April 13, 1995.