Coram Agrees To Buy Lincare For $1 Billion --- Stock Transaction to Add Respiratory Therapy To Home Care Services
Coram Healthcare Corp. agreed to acquire Lincare Holdings Inc. for about $1 billion in stock, further fueling the heated pace of consolidation and competition in the home health-care industry.</br></br>The tax-free transaction would create an entity with projected 1995 revenue of about $1.1 billion. That would put fast-growing Coram neck-and-neck with its nearest industry rival, the combined Abbey Healthcare Group Inc. and Homedco Group Inc., which announced merger plans on March 2.</br></br>At a time when insurers and managed-care networks are demanding lower costs and one-stop shopping from home healthcare providers, the combination would add home respiratory therapy to the service arsenal of Denver-based Coram, which was created last year through the combination of four smaller home-infusion companies.</br></br>Pressure to treat patients outside expensive hospital settings has led to rapid growth in home health care, which offers home delivery of services such as providing oxygen to asthma patients or using intravenous devices to deliver nutrition and medicine.</br></br>Although industry analysts generally praised the strategic value of the Coram acquisition, concerns over its price drove Coram shares down $2, or 8%, to $23 in heavy New York Stock Exchange trading. Lincare shares soared $4.313, or 15%, to $33.625 on the Nasdaq Stock Market.