InterCare to Buy Health Clinic Chain

InterCare, a Southern California chain of health clinics, agreed Wednesday to pay about $3.1 million in cash and stock to acquire another California chain, U.S. Medical Enterprises, and a pharmacy business owned by U.S. Medical’s president.

The merger of the two health clinic operators would create the largest health clinic chain in Los Angeles and Orange counties, with about 170 employees and combined revenue of about $25 million, according to Richard Scott, executive vice president of InterCare.

Formed last year, Los Angeles-based InterCare operates 27 health-care facilities in Southern California.

U.S. Medical, which merged with American Emergicenter Inc. of Orange County last September, has 12 clinics in Los Angeles and Orange counties.

Wednesday’s merger comes at a time of explosive growth in the so-called urgent care industry. In 1982, for example, there were 30 centers in California; now there are more than 200 statewide, according to the National Assn. for Ambulatory Care Centers, an industry trade group in Dallas.

The transaction announced Wednesday calls for InterCare to pay about $1.3 million in cash and stock for the 40% of U.S. Medical owned by that company’s chairman, Dr. Thomas Borut, and its president, Michael O’Neil.

The remaining shareholders of U.S. Medical would receive one share of InterCare common stock for each 2 shares of U.S. Medical common stock.

Separately, InterCare said it would give O’Neil $64,765 worth of stock for his KDS Enterprises Inc. pharmacy business. As part of the deal, Borut and O’Neil entered into employment, non-competition and other financial agreements with U.S. Medical.