Coram to Buy Lincare for $1 Billion

Coram Healthcare Corp. has agreed to acquire Lincare Holdings Inc. in a $1-billion stock deal that would give Coram a big presence in the home respiratory market, the companies said Tuesday.

Denver-based Coram said it is the nation’s largest provider of home infusion therapy and that Lincare is the second-largest provider of home respiratory therapy.

Under the deal, Lincare stockholders would receive 1.54 shares of Coram common stock for each share of Lincare. Based on Monday closing prices, the deal is worth $38.50 per Lincare share, or $1.03 billion.

Lincare shares jumped $4.31 to $33.63 on Nasdaq; Coram fell $2 to $23 on the New York Stock Exchange.

The decline in Coram’s stock price cut the deal’s value to about $950 million.

The deal is subject to the approval of regulators and the stockholders of both companies. The transaction is expected to close in early July.

Coram was formed in the third quarter of 1994 through the combination of four home infusion companies; a fifth was bought in September. Two weeks ago, Coram completed the $309-million purchase of Caremark International Inc.’s home infusion business.

With Lincare, the combined company will have $1.1 billion in annual revenue.

Lincare, based in Clearwater, Fla., provides oxygen and other respiratory therapy services to patients in the home. It has more than 65,000 customers in 35 states.

James Sweeney, chairman and chief executive of Coram, would remain in those posts after the merger. James Kelly, chairman and chief executive of Lincare Holdings, would become Coram vice chairman.

“We intend to keep Lincare as a separate operating entity working hand-in-hand with our infusion therapy business to generate significant revenue gains,” Sweeney said in a statement.

He said Coram intends to expand Lincare’s presence from about 50% of the major metropolitan markets to more than 96% of the country as served by Coram. New York, Chicago, Minneapolis and Philadelphia represent superb expansion areas for Lincare services, he added.