Extracts in the first section describe
Centennial's formation and the extent of its operations. The second
set of extracts is chronological documenting Centennial's progress.
Trilogy strategy aims to avoid industry
difficulties
Business First-Louisville June 7, 1999
Bufford, 39, and Kitchen, 36, were both with Transitional Health Services Inc. of Louisville, a nursing home company that merged with WelCare International Inc. of Atlanta in 1995.- - - - - - The company changed its name to Centennial HealthCare Corp. following the merger.
Centennial HealthCare Corporation
Announces Signing of a Definitive Merger Agreement for $ 16.00 Per
Share in Cash With a Company Formed by Welsh, Carson, Anderson &
Stowe
Business Wire October 22, 1998
Centennial HealthCare Corporation, headquartered in Atlanta, Georgia, provides a broad range of long-term care services to meet the medical needs of elderly and post-acute patients. Including facilities under contract but not yet being operated, the Company operates 101 owned, leased and managed skilled nursing facilities with approximately 10,800 licensed available beds in 19 states and district of Columbia. In addition, through its subsidiaries, the Company provides comprehensive rehabilitation services and home healthcare services.
COMMENT:- Centennial is the 14th largest nursing home chain in the USA.
Top 15 nursing home chains
Modern Healthcare By the Numbers Supplement July 31,
2000
Top 15 nursing home chains Ranked by number of beds as of January 1999Rank - - - -Company - - - - - - - - - - - -Beds
1 Beverly Enterprises Fort Smith, Ark. - - - - - - 62,293
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14 Centennial HealthCare Corp. Atlanta - - - - - - 11,575
COMMENT:- Note that Centennial is listed among the undertperforming companies at risk of being taken over
Banking: financing trends in an
acquisitive health care market - focus on long-term care.
Journal of Health Care Finance June 22, 1998
Gordon, Lawrence J.; Bressler, Andrew
IntroductionThe merger and acquisition (M&A) frenzy sweeping the health care industry has been particularly intense in the long-term care sector. As a result, the financial community - both lenders and investors - now views this sector differently and the approach to long-term care financing has changed. based on our experience, we focus on six factors driving consolidation in the sector and - through the use of four transactions as a platform - discuss the key credit issues and risks faced by long-term care companies today.
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Despite dramatic M&A activity in the long-term care sector during 1997, several mid-sized, long-term care companies remain potential acquisition candidates at the time this article goes to press, including Summit Care, Mariner Health Group, Advocat, Harborside Healthcare, and Centennial Healthcare.In addition, many long-term care companies continue to develop regional concentrations, creating additional M&A opportunities as companies exit nonstrategic markets and acquire market share in others, while adding additional post-acute care services, such as home health care, sub-acute care, and specialty services.
COMMENT:- Centennial uses a different approach to this threat.
Centennial HealthCare Corporation
Announces Signing of a Definitive Merger Agreement for $ 16.00 Per
Share in Cash With a Company Formed by Welsh, Carson, Anderson &
Stowe
Business Wire October 22, 1998
Oct. 22, 1998-- Centennial HealthCare Corporation (Nasdaq/NM:CTEN) announced today that based upon the unanimous recommendation of a special committee composed of independent directors of the Company, the Company's Board of Directors approved the sale of the Company for $ 16.00 per share in cash to a new company formed by Welsh, Carson, Anderson & Stowe ("WCAS"). Affiliates of WCAS currently beneficially own approximately 23% of the Company's outstanding shares. As provided in the definitive merger agreement, the Company may not solicit other acquisition transactions, but, if advised by its counsel that it is its fiduciary duty to do so, it may receive and negotiate proposals from third parties for such transactions.
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Carson, Anderson & Stowe's substantial financial resources will provide the Company with the ability to continue to pursue aggressively its acquisition and development activities. The shareholders will receive almost double the current stock price in cash, our employees will continue to have career opportunities with a growing company and our facility residents and their families will continue to be served by a company committed to providing quality care."Welsh, Carson, Anderson & Stowe, formed in 1979, is one of the largest private equity investment firms in the United States with $ 8 billion of capital under management. The firm is the leading private investment firm in the healthcare and information services industries.
Buyout offer triggers stock to rise
68%
SOUTH BEND TRIBUNE October 23, 1998
Shares of Centennial Healthcare Corp. rose 68 percent Thursday after the nursing home operator said it agreed to a buyout offer from a New York private investment firm.The corporation operates 101 nursing homes in 19 states, including Transitional Health Services at 5024 Western Ave. in South Bend. The corporation has announced plans to close Transitional Health because of financial losses.
Welsh Carson Anderson & Stowe will acquire Centennial for $16 a share, nearly double the stock's Wednesday closing price of $8.50.
The news sent Centennial Healthcare's shares climbing $5.75 to close at $14.25, on NASDAQ volume of 1.3 million shares. Average daily volume is 98,100. Excluding the 23 percent of Centennial Healthcare that Welsh Carson Anderson & Stowe already owns, the deal has a value of $150.5 million.
COMMENT:- Note Centennial's acquisition of Transitional health Services in 1996 and its continual expansion during 1998. At the same time it was being acquired by an equity investment firm. This was not seen as a takeover but as a way to refinance the company by changing ownership and removing it from the acute pressures of the sharemarket.
Centennial HealthCare Corporation
Announces Third Quarter Results
Business Wire November 4, 1998
J. Stephen Eaton, president and chief executive officer of Centennial HealthCare, said, "We are pleased to report that the Company achieved its earnings estimate for the third quarter of 1998 of $ 0.29 per share before nonrecurring charges. We have completed our detailed analysis of the impact of the change in Medicare reimbursement and are on schedule with training and implementation. "While some of the Company's operations benefit from the change in reimbursement and others are likely to experience a decline in earnings, we anticipate that, following a transition period, the net effect of PPS on the Company will be earnings neutral. The Company anticipates a decrease in revenues of approximately $ 25 million for 1999; however, we believe that this decrease will be offset by a comparable reduction in expenses, primarily related to ancillary services."
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In addition, Centennial HealthCare recorded a pre-tax loss of $ 4.0 million relating to the closure of one of its facilities which has been held for sale since its acquisition on January 1, 1996, as part of the Company's merger with Transitional Health Services, Inc. This facility has generated losses of approximately $ 1.2 million during 1998. During October 1998, the Company acquired this facility and terminated the lease. On October 22, 1998, Centennial announced that its Board of Directors had approved the sale of the Company for $ 16.00 per share in cash to a new company formed by Welsh, Carson, Anderson & Stowe.Mr. Eaton continued, "The recently proposed merger of Centennial HealthCare with a company formed by Welsh, Carson, Anderson & Stowe is proceeding on schedule. The Company believes that this merger will be in the best interests of its shareholders, employees, residents and their families." During the third quarter, the Company expanded its revolving senior credit facility from $ 125 million to $ 160 million through syndication with a bank group led by NationsBank and First Union as agents. The Company transferred approximately $ 26 million of assets currently leased by the Company to the credit facility at more favorable terms to Centennial.
On August 1, 1998, the Company began leasing an 82-bed skilled nursing facility located in Mississippi, where the Company already has a strong operating presence. Subsequent to the close of the third quarter, the Company completed several transactions adding approximately 600 additional beds. On October 1, 1998, the Company began leasing two skilled nursing facilities totaling 440 beds located in Kansas City, Missouri. Additionally, the Company acquired a 70-bed facility located in Little Rock, Arkansas, which was previously managed by the Company. On November 1, the Company began operating a facility in Ackerman, Mississippi, with 22 acute care hospital beds and 68 skilled nursing beds, which the Company anticipates leasing following receipt of all necessary consents and approvals.
Centennial Healthcare Corporation and
Welsh, Carson, Anderson & Stowe VIII, L.P. Announce Extension of
Closing Date
Business Wire March 5, 1999
March 5, 1999-- Centennial HealthCare Corporation (Nasdaq/NM:CTEN) and Welsh, Carson, Anderson & Stowe VIII, L.P. announced today the amendment of the Agreement and Plan of Merger entered into by the parties on October 22, 1998, to extend the date of closing from March 31, 1999, to April 15, 1999.
Centennial Announces Records Request by
the Department of Health and Human Services
Business Wire March 30, 1999
March 30, 1999-- Centennial HealthCare Corporation (Nasdaq/NM:CTEN) announced today that it has received an investigatory subpoena from the Department of Health and Human Services, Office of Inspector General, requesting copies of records in connection with a civil investigation of possible or otherwise improper claims for payment under Title XVIII (Medicare) of the Social Security Act. The subpoena relates to certain of Centennial's internal policies and relates to four long-term care facilities operated by Centennial.
Nursing home company's billing is
probed
The Atlanta Journal and Constitution March 31, 1999
Shares of Centennial HealthCare, an Atlanta-based nursing home operator, fell sharply Tuesday after the company announced it received a federal subpoena for Medicare billing records.The request targets four Centennial facilities, but the federal Office of Inspector General's subpoena appears to pertain to the whole company, said Alan Dahl, Centennial's chief financial officer.
Only one of Centennial's 107 nursing homes is in Georgia. Dahl said that facility, Ashton Woods Rehabilitation Center in Chamblee, wasn't among the four facilities named.
------------------------------------
"There has been no wrongdoing pointed out to us,'' Dahl said. "We certainly don't welcome this process, but by no means do we fear it.''The federal request for information comes just days before an acquisition of Centennial is expected to close.
---------------------------------
"Something like this could jeopardize the deal,'' said analyst Murray Innes of Credit Lyonnais Securities.
---------------------------------
Analyst Innes said Centennial and its buyer may have to delay the acquisition. "Investors are rightly concerned that this will scuttle the deal, '' he added.Centennial, which has grown from acquisitions, reported net income of $ 9.9 million on revenues of $ 304.3 million in 1997.
Olsten to Pay $61 Million in Medicare
Billing Case
The New York Times March 31, 1999
MILT FREUDENHEIM
In another health care investigation, the Centennial Healthcare Corp. said Tuesday that the inspector general's office of the federal Health and Human Services Department had subpoenaed portions of its records. Centennial, based in Atlanta, operates 107 nursing homes. Centennial shares fell $7.0625 Tuesday, more than 44 percent, to $8.4375.Shares of Centennial, which was acquired last year for $16 a share by Welsh, Carson, Anderson & Stowe LP, a New York buyout firm, had dropped more than 30 percent in the 12 months preceding the subpoena.
Centennial HealthCare Corporation
Announces That Welsh, Carson, Anderson & Stowe has Terminated the
Proposed Merger; Company Also Announces Year-end Results
Business Wire April 5, 1999
April 5, 1999-- Centennial HealthCare Corporation (Nasdaq/NM:CTEN) announced today that Welsh, Carson, Anderson & Stowe (WCAS) has notified Centennial that it will not close the merger with Centennial pursuant to the terms of the Agreement and Plan of Merger dated October 22, 1998, by and between affiliates of Centennial and WCAS. The merger was scheduled to close on April 15, 1999. In its notice to terminate the merger, WCAS cited the pending investigation of Centennial by the Department of Health & Human Services, Office of Inspector General, which was previously disclosed in Centennial's press release dated March 30, 1999. WCAS requested that Centennial agree to a mutual termination of the merger, which Centennial declined.The Company also announced results for the fourth quarter and year ended December 31, 1998.
--------------------------------
Earnings for the fourth quarter of 1998 were reduced by approximately $ 2.2 million due to the write-off of accrued expenses related to the proposed merger. In addition, earnings were reduced by approximately $ 1.2 million to establish a $ 2.0 million reserve against 1996 related party income currently under appeal with the Company's Medicare intermediary. Including nonrecurring items, net loss applicable to common stock for the fourth quarter ended December 31, 1998, was approximately $ 612,000, or $ 0.05 per share.
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In closing, Mr. Eaton said, "Fiscal year 1998 was a year of progress for Centennial HealthCare. During the year, we added nine skilled nursing facilities through management contracts, one through the acquisition of a leasehold interest in a previously managed facility, and 13 facilities through the acquisition of leasehold interests. While 1999 has presented the industry as a whole with challenges, I believe that Centennial HealthCare has the management team, information systems, and most importantly, the people in the field to make 1999 another successful year for the Company."
With acquisition off, Centennial's shares
drop again
The Atlanta Journal and Constitution April 6, 1999
Shares of Centennial HealthCare tumbled for the second time in a week Monday after an investment firm called off its planned acquisition of the nursing home company.Centennial shares traded as low as $ 1, a 52-week low, before closing at $ 4.31 1/4, down $ 4.18 3/4 --- or 49 percent --- in heavy Nasdaq trading.
That drop followed a 45 percent slide last Tuesday, after Centennial announced it received a federal subpoena for Medicare billing records involving four of its nursing homes.
Also Monday, Centennial reported lower-than-expected fourth-quarter earnings.
--------------------------------
Alan Dahl, Centennial's chief financial officer, reiterated Monday, "I don't see any reason for the OIG to suspect wrongdoing."Centennial reported a loss of $ 612,000, or 5 cents per share, in the fourth quarter. The compared with net income of $ 3.9 million, or 32 cents a share, in the fourth quarter 1997.
Centennial Reports First Quarter Results;
Company Succeeding in Prospective Pay Reimbursement Environment
Business Wire May 10, 1999
May 10, 1999-- Centennial HealthCare Corporation (Nasdaq/NM:CTEN) today announced results for the first quarter ended March 31, 1999. For the first quarter ended March 31, 1999, net revenues were $ 98.0 million, up 13% over $ 87.1 million in the same quarter of last year. Prior to nonrecurring charges, net income was approximately $ 966,000, or $ 0.08 per share (diluted), compared with the prior year's $ 3.8 million, or $ 0.32 per share (diluted). During the quarter, the Company recorded nonrecurring charges of $ 600,000 related primarily to the estimated costs accrued for the Company's terminated proposed merger. Including the nonrecurring charges, net income was approximately $612,000, or $ 0.05 per share (diluted) for the quarter ended March 31, 1999.
COMMENT:- Note Centennial's history - also that senior staff are leaving the company.
Trilogy strategy aims to avoid industry
difficulties
Business First-Louisville June 7, 1999
Bufford, 39, and Kitchen, 36, were both with Transitional Health Services Inc. of Louisville, a nursing home company that merged with WelCare International Inc. of Atlanta in 1995.Bufford became vice president of business development, and Kitchen became vice president ol' marketing. The company changed its name to Centennial HealthCare Corp. following the merger.
When Bufford and Kitchen moved, they knew it was temporary.
"We're Louisville boys, and we wanted to get back home at some point in time," Bufford said.
Centennial has facilities in 19 states. "We spent a lot ol' time on jets," Bufford said. "That doesn't make for a great home life."
Kitchen said lie learned a lot with Centennial but he was tired of traveling so much. "lt takes its toll," he said.
In late 1997, Bufford was back in Louisville and formed Trilogy. He's 80-percent owner as well as president and chief executive officer.
Kitchen joined the company as executive vice president of business development and IO-percent owner in August 1998. The third partner is Paul Plevyak, 44, the chief financial officer.
Nursing homes hit hard by cuts in Medicare
pay
Business Dateline; Atlanta Business Chronicle July 9,
1999
Feeling the most pain are companies that depend heavily on Medicare, the federal health insurance program for acutely ill elderly, and must show shareholder value, Watson said.
----------------------------
Meanwhile, another Atlanta-based nursing home company, Centennial HealthCare Corp. (Nasdaq/NM: CTEN), is faring a little better on Wall Street than its Atlanta competitors -- closing at $ 5.38 on July 6 - because it has other sources of revenue besides Medicare, several area health-care consultants said.But Centennial still is losing money. Its net loss for 1998 was $315,000, a drastic drop from its net income of $ 9.8 million in 1997. Centennial's revenue increased from $ 304.3 million in 1997 to $ 357.6 million last year. Centennial operates 107 long-term-care facilities, including one in Georgia -- Ashton Woods Rehabilitation Center in Chamblee.
Centennial hasn't escaped all of the pitfalls of accepting Medicare patients. It announced in March it was being investigated for possible Medicare billing discrepancies, leading to a sharp stock plunge. A month after the announcement, a potential merger partner ended a proposed $ 290 million deal to buy the company and take it private.
COMMENT:- The big financiers are not too fussy about the ethics of the companies they invest in, provided the money rolls in. Note the explanation for the lawsuit against Quorum. These people actually believe what they say. This is the sort of rationalisation adopted by successful sociopaths when forced to respond to evidence. This is what Quorum and Centennial have been telling their financial backers. It is what they want to hear and they believe it.
Government Investigates Welsh Carson
Companies
BuyOuts July 19, 1999
In the last six months, the government has been investigating two health-care companies partially owned by Welsh, Carson, Anderson & Stowe for Medicare fraud-resulting in sinking stock prices for both companies.The government has alleged that Quorum Health Group, one of the nation's largest hospital management companies, routinely overbilled Medicare resulting in the federal government being bilked out of $50 million. The case now is being heard in the United States District Court for the middle district of Florida in the Tampa Division.
At the same time, the federal government is investigating the practices at Centennial Healthcare Corp. an owner of nursing facilities that focus on the needs of the elderly but has yet to file any charges.
------------------------------
Russell Carson, a general partner at the firm and chairman of the board of Quorum, said the government is attempting to legally extort money from Quorum through the lawsuit so it can cut the costs of running the Medicare program."Quorum is a totally honest and ethical company. All of the claims and examples the government has used so far are from companies managed by Quorum, not owned by Quorum," Mr. Carson said. Quorum owns 21 hospitals, and manages 230 not-for-profit hospitals in 44 states. Mr. Carson said he believes the government named Quorum as the defendant because it has the deepest pockets. Although he notes that mistakes do occur when filing claims in the archaic Medicare billing system, Mr. Carson said the government is "trying to turn honest mistakes into punishable mistakes."
------------------------------
Welsh Carson still is moving ahead in health care-traditionally one of its primary targets-but it is limiting its investments to suburban and rural hospitals and avoiding nursing homes, Mr. Carson said. Health care represents 14 percent of America's gross national product and the industry will rebound for investors, he added.
--------------------------------
"I hope people do not take the lawsuits too literally; it is part of a negotiation process, not a damnation of our ethics," Mr. Carson said. He pointed out that the government also recently filed suits against the University of Pennsylvania and Yale University for Medicare fraud.
Centennial Reports Second Quarter
Results
Business Wire August 5, 1999, Thursday
Centennial HealthCare Corporation (Nasdaq/NM:CTEN) today announced earnings, prior to nonrecurring charges, of $ 0.12 and $ 0.20 per share (diluted) for the second quarter and six months ended June 30, 1999, respectively.In commenting on the Company's second quarter performance, J. Stephen Eaton, president and chief executive officer of Centennial HealthCare, said, "I am pleased with the Company's performance during the second quarter. Our facilities have maintained stable census levels and cost controls while keeping the delivery of quality care to our residents as their number one priority. Additionally, our facilities have experienced increases in average lengths of stay as well as Medicare reimbursement rates.
COMMENT:- Centennial's Chief Fincancial Officer is buying shares which are at an all time low US $3.12. Could he know about a potential purchaser?
INSIDER TRADING: Retiree, others at Home
Depot sell
The Atlanta Journal and Constitution October 17, 1999
At Centennial HealthCare, Alan C. Dahl, chief financial officer, bought 20,000 shares on Aug. 19 at $ 3.94 each, totaling $ 78,800. He now holds 102,972 shares directly and indirectly, worth $ 321,788 at Friday's price of $ 3.12 1/2 on Nasdaq.
--------------------------------
Centennial HealthCare's shares, and those of other nursing home operators, have been reeling because of cuts in payments from Medicare, but Congress might soon provide the companies with some relief.Centennial HealthCare's shares are down 79.8 percent this year.
Medicare cuts: Industry taking a big hit;
Home health care agencies, hospitals and nursing homes are still
reeling
The Atlanta Journal and Constitution October 31, 1999
Nursing homesFrom an investment standpoint, the nursing home sector has been in a free fall since the BBA.
Stephen Eaton, chief executive of Atlanta-based nursing home chain Centennial HealthCare, says Medicare cuts have created a more than $ 50 billion loss of public equity and debt in the industry.
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NURSING HOMES: THE CHAINS' SINKING STOCKS...Selected Public Companies:...1/2/98............. Now..........Pct.change
Manor Care. ...................................... $40.................. $ 5.75............. -60.9%
Beverly Enterprises. ....................... $13.06 1/4......$ 3.93 3/4...... -69.9%
Centennial HealthCare. ... ...........$22.50............ $2.50............. .-88.9%
Genesis Health Ventures....................$26.50..............$1.75...............-93.4%
Integrated Health Services. ............ $32.12 1/2........28 cents.......... -99.1%
Vencor. ............................................ $29.37 1/2* .....17 cents.......... -99.4%
Mariner Post-Acute Network......... .$19.00................ 9 cents.. .........-99.5%
Sun Healthcare Group...................... $19.81 1/4......... 6 cents........... -99.7%
*price on April 8, 1998
Source: National Association for Home Care / Elizabeth Landt / Staff
Centennial Reports Third Quarter
Results
Business Wire November 10, 1999
Centennial HealthCare Corporation (Nasdaq/NM:CTEN) today announced results for the third quarter and nine months ended September 30, 1999. For the quarter ended September 30, 1999, the Company reported net revenues of $ 99.8 million, compared with $ 89.6 million in the third quarter of last year. Net income for the third quarter was $ 1.0 million, or $ 0.09 per share (diluted), compared with net income, before nonrecurring charges, of $ 3.4 million, or $ 0.29 per share (diluted), for the third quarter of 1998.
Long-Term Health Despair
The Motley Fool (Dec. 21, 1999)
By Brian Graney (TMF Panic)
(Dec. 21, 1999) --For the second year in a row, it was a tough year to be a publicly traded long-term healthcare provider.
-------------------------------
The destruction has been startling, as the following chart shows:
---------------------------------
Centennial HealthCare (Nasdaq: CTEN) $15 9/16 ... $2 15/16 .... -81%
---------------------------------
For the most part, the companies that find themselves in bankruptcy proceedings and trading in the pink sheets can only blame the government to a certain extent for their inglorious fates.
------------------------------
Meanwhile, the government further put the screws to the industry by opening up Medicare billing fraud probes at several operators, including Beverly, Centennial, and Vencor, scaring away even more investors.
COMMENT:- Another big financial group is prepared to rescue Centennial but at roughly one third of the price of the previous offer. This is almost twice what the Chief Fincancial Officer paid only 4 months ago - a healthy return on the investment he made?
Centennial HealthCare Corporation
Announces Definitive Merger Agreement With Affiliate of E.M. Warburg,
Pincus & Co., LLC
Business Wire February 25, 2000, Friday
Centennial HealthCare Corporation (Nasdaq/NM:CTEN) today announced that Centennial and an affiliate of E.M. Warburg, Pincus & Co., LLC ("Warburg Pincus") have entered into a definitive merger agreement providing for the purchase of Centennial for cash consideration of $5.50 a share. A special committee composed of independent directors recommended the transaction to Centennial's Board of Directors.The Warburg Pincus affiliate will commence a cash tender offer to purchase all of the outstanding shares of Centennial's common stock.
-----------------------------
J. Stephen Eaton will remain Chairman and Chief Executive Officer.
-------------------------------
Warburg Pincus is a major global private equity investment firm that has invested more than $9 billion in over 300 companies across a broad range of industries since 1971.
Shares of Centennial HealthCare up 74%
amid buyout deal
The Atlanta Journal and Constitution February 26, 2000,
Saturday
Shares of Centennial HealthCare rose 74 percent Friday after the Atlanta- based nursing home operator announced it would be acquired for $ 65.4 million.
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If the acquisition is completed, Centennial will operate as a private company. It will remain based at Perimeter Center Terrace, with the same management team, said Alan Dahl, Centennial's chief financial officer.On Friday, Centennial's shares climbed $ 2.15 5/8 to close at $ 5.09 3/8 in Nasdaq trading. Its 52-week high of $ 15.56 1/4 was in March 1999.
The merger announcement comes almost a year after the investment firm Welsh, Carson, Anderson & Stowe canceled its acquisition of Centennial for about $ 290 million. That's four times the current price.
--------------------
Centennial has escaped such financial disaster (referring to bankruptcies), Dahl said, because of lower debt and the company's focus on operations.
COMMENT:- Senior staff are to keep their jobs and some are even getting a windfall. As always it is the shareholders who lose out. They don't like the way this has been done.
Centennial HealthCare Corporation
Addresses Class Action Suit
Business Wire March 3, 2000, Friday
Centennial HealthCare Corporation (Nasdaq/NM:CTEN) today announced that on March 2, 2000, it received a complaint filed in the Superior Court of Fulton County, State of Georgia, filed by Crandon Capitol Partners as a purported class action for compensatory damages and injunctive relief arising from the Merger Agreement between Centennial and an affiliate of E.M. Warburg, Pincus & Co., LLC. The complaint names Centennial and its directors as defendants and alleges that defendants breached their fiduciary duties in connection with the merger by, among other things, failing to conduct an auction or other suitable market check, failing to consider other strategic alternatives and accepting insufficient consideration.
COMMENT:- The banks are cutting down on credit. Another way of staying solvent is to get out of the competitive sharemarket and find a wealthy owner to replace shareholders.
HEALTH CARE CO OPTS FOR MERGER OVER LOAN
INCREASE
Loan Market Week March 6, 2000
Atlanta, Ga.,-based Centennial HealthCare recently decided it would be better able to arrange working capital and acquisition funding by amending an existing loan agreement to allow a merger, rather than increasing its loan funding. Alan Dahl, cfo at the health care provider, said Centennial is asking its bank group to amend its $ 220 million credit agreement to allow the merger with E. M. Warburg, Pincus & Co., a venture capital and private equity firm in New York.Centennial did not formally approach the First Union-and Bank of America-led bank group to increase the loan, after getting informal feedback that the group would have no interest in increasing the credit, Dahl said.
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Under the terms of the merger Warburg will buy a minimum of 68.5% of the company's outstanding shares, and contribute $ 15 million cash to the company.
COMMENT:- The truth emerges. Centennial is short on cash. Annual reports and press releases have not mentioned this.
Centennial HealthCare Corporation Delays
Form 10-K Filing
Business Wire March 31, 2000, Friday
Centennial HealthCare Corporation (Nasdaq/NM:CTEN) today announced that it will file with the Securities and Exchange Commission for an extension of the deadline for filing its 1999 Annual Report on Form 10-K. Delays in finalizing necessary reviews of financial statements, including reviews of the adequacy of reserves, necessitated this delay. The Company expects to file its Form 10-K on or before April 14, 2000.
Hilltopper Holding Corp. Extends Tender
Offer for Centennial HealthCare Corporation
Business Wire April 14, 2000, Friday
Hilltopper Holding Corp. announced today that it is extending the $5.50 per share cash tender offer made by its wholly owned subsidiary, Hilltopper Acquisition Corp., for all the outstanding shares of common stock of Centennial HealthCare Corporation (NASDAQ:CTEN) to allow Centennial HealthCare Corporation additional time to obtain certain required regulatory approvals and certain other consents. The tender offer, as extended, will expire at 5:00 p.m., New York City time, on Monday, May 1, 2000, unless further extended. As of midnight on April 13, 2000, approximately 6,086,723 shares of Centennial HealthCare Corporation's common stock representing approximately 51% of the outstanding shares, had been validly tendered and not withdrawn in connection with the tender offer. These shares, when taken together with the 4,710,252 shares being contributed to Hilltopper Holding Corp. by certain shareholders of Centennial HealthCare Corporation, represent approximately 90.6% of the outstanding shares.
Rebuilding from the rubble ; Start-ups
seek value in financially ruined, decidedly unglamorous nursing home
industry
Modern Healthcare May 1, 2000, Monday
"It has all the ingredients of an industry in turmoil. Anytime any sector is in turmoil you have contrarian people who look for value," says William Mulligan, a Milwaukee-based senior vice president at B.C. Ziegler and Co., a healthcare investment banking firm.From March 1998 to December 1999, the value of the public nursing home industry fell 83%, from $13.4 billion to $2.3 billion, according to Charles Lynch, a New York-based healthcare analyst at CIBC World Markets. "The implications are fairly profound, in the sense of capital flowing to the industry," he says.
But Mulligan and others say there's still some money out there if you know where to look.
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Strangled by the combination of deep debt and suddenly lower payments, four chains went bankrupt in rapid succession: first Vencor, then Sun Healthcare Group, Mariner Post-Acute Network and Integrated Health Services. Last month, a fifth chain, Genesis Health Ventures, defaulted on its interest payments and announced it was initiating restructuring talks with lenders. Other smaller nursing homes chains--including Lenox Healthcare, the Frontier Group and Texas Health Enterprises--also filed for bankruptcy protection in recent months.Many of those bankruptcies were precipitated by the inability to make good on debt accumulated from acquisitions.
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The result: large chains downsizing and small operators selling out to mid-sized regional operators. And private money is facilitating the makeover.The most obvious evidence of the influx of new capital to the industry is the pending privatization of two publicly traded nursing home chains. Both companies escaped the heavy financial losses that have typified the public industry in the past year, but neither could avoid the industrywide erosion of stock prices.
First to go is Centennial Healthcare, which by May 1 will be taken private by private equity firm E.M. Warburg, Pincus & Co. The buyout of the Atlanta-based company's 100 nursing homes is valued at about $65.5 million, and is expected to be completed even though the company is under investigation by HHS' inspector general's office for possibly fraudulent Medicare labor cost allocations.
Hilltopper Holding Corp. Announces
Completion of Tender Offer for Centennial HealthCare Corporation
Business Wire May 2, 2000, Tuesday
Hilltopper Holding Corp. announced today that its wholly owned subsidiary, Hilltopper Acquisition Corp., has accepted for payment 6,179,862 shares of common stock of Centennial HealthCare Corporation (NASDAQ: CTEN) representing approximately 51.8% of the outstanding shares of Centennial HealthCare Corporation (including 132,900 shares tendered by means of guaranteed delivery), at $5.50 per share in cash in accordance with its tender offer for all outstanding shares of Centennial HealthCare Corporation.These shares, when taken together with the 4,710,252 shares being contributed to Hilltopper Holding Corp. by certain shareholders of Centennial HealthCare Corporation, represent approximately 91.3% of the outstanding shares. 1,033,504 shares of Centennial HealthCare Corporation (not including the 4,710,252 contributed shares) were not tendered and remain outstanding. The tender offer expired at 5:00 p.m., New York City time, on Monday, May 1, 2000.
As previously disclosed, Hilltopper Holding Corp. intends to merge Hilltopper Acquisition Corp. with and into Centennial HealthCare Corporation in accordance with the merger provisions under Georgia law. As a result of the merger, Centennial HealthCare Corporation will become a wholly owned subsidiary of Hilltopper Holding Corp. and each remaining outstanding share of Centennial HealthCare Corporation will be converted, subject to appraisal rights, into the right to receive$5.50 in cash, without interest.
Hilltopper Holding Corp. Completes Its
Acquisition of Centennial Healthcare Corporation
Business Wire June 15, 2000
Centennial HealthCare Corporation (Nasdaq/NM:CTEN) today announced that Hilltopper Holding Corp. completed its acquisition of Centennial with the merger of Hilltopper Acquisition Corp., a wholly owned subsidiary of Hilltopper Holding Corp., with and into Centennial. Prior to the merger, Hilltopper Holding Corp. held beneficial ownership of approximately 91.3% of Centennial's common stock. The merger became effective June 14, 2000. This merger was approved by Centennial's shareholders at a special meeting of shareholders held on June 12, 2000. As a result of the merger, Centennial has become a wholly owned subsidiary of Hilltopper Holding Corp.
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As a result of the merger, Centennial has requested that Nasdaq delist its common stock effective at the close of business on June 15, 2000.
Transactions : E.M. WARBURG PINCUS &
CO./CENTENNIAL HEALTHCARE CORP.
Daily Deal (New York, NY) June 15, 2000
- - - - in a going-private transaction for $5.50 per share, or about $65 million.
THREE FORMER EMPLOYEES OF NURSING HOME
AWARDED DAMAGES
The Providence Journal-Bulletin September 6, 2001
A Massachusetts jury finds in favor of two workers who said they were fired by a Lincoln man because of their age, and a third who said she was sexually harassed.CAMBRIDGE, Mass. - A Massachusetts nursing home has been ordered to pay more than $230,000 to three former employees after a jury found last week that Donald Baker, a Lincoln resident and administrator of the home, fired two of the employees because of their age and sexually harassed another.
Atlanta-based Centennial Healthcare Corp., which owns Charlwell House in Norwood, Mass., is being held liable in the $234,400 verdict. Lawyers for the former employees said they expect the payment to reach $450,000 by the time interest and lawyers' fees are added.
Care firm will fight punishment for harassment
The Boston Herald September 5, 2001Centennial Healthcare Corp. says it will appeal a $ 236,000 jury verdict in a case in which former workers at a Norwood nursing home claimed the company and a nursing home administrator engaged in a pattern of sexual harassment and age discrimination.
Center found in compliance, with problems,
in May report
Fort Wayne News Sentinel May 16, 2002
Although Riverbend Health Care Center was found to be in compliance last May after its annual survey, it had to correct several problems related to residents' care and quality of life.The facility, at 7519 Winchester Road, is under scrutiny by state and local authorities for the alleged abuse of a 93-year-old resident in March.
Four complaints were reported and substantiated between April and December 2001. - - - .
One of the most serious deficiencies found by health department inspectors in October was failure of Riverbend to document and report the presence of massive bruising on a resident. Inspectors viewed bruises on the woman's back, hip, thigh and behind her knee, as well as bruises on her arms measuring up to 20 inches.
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Riverbend Health Care Center is owned by Transitional Heath Partners and is managed by Centennial Healthcare Management Corp., both of the same address in Atlanta. However, no documentation was filed on how the bruising occurred.
Salomon Cuts Health Care Property
Rating
BusinessWeek Online DECEMBER 3, 2002
Analyst Jonathan Litt says Centennial Healthcare defaulted on its payments. Health Care Property says it sent default notices to the company, which is its eighth largest tenant. Litt says Centennial had accounted for $10.6 million, or 3.1%, of the company's annual revenues. He adds that the non-payment of roughly $900,000! in monthly rent resulted in Health Care Property's 19 cent loss per share in funds from operations on a fiscal basis.
Centennial HealthCare Files for Chapter 11
Reorganization
Company web site December 20, 2002
On December 20, 2002, Centennial HealthCare Corporation, many of its subsidiaries and certain affiliates ("Centennial") filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Although this was not an easy decision to make, it is the correct one given the amount of debt Centennial is carrying and the number of creditors the Company has to negotiate with to restructure its debt. The bankruptcy court provides an orderly forum for negotiating in a way that minimizes any disruptions to the Company's normal operations.
Parent seeks buyer for Kents Nursing
Center
Fort Worth Star Telegram (Texas) August 4, 2003
Financial woes at nursing homes nationwide are hitting home at Fort Worth's Kents Nursing Center. The 107-bed long-term-care facility is on the market, its parent company having sought bankruptcy protection in December.
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Centennial, which owns about 70 nursing homes and rehabilitation centers nationwide, has struggled financially - - - - - -"We are actually part of a second wave," he said. "Unless Congress and everybody gets together, there's likely to be another big wave of that."
