Top Rehab Center Chains to Combine

HealthSouth Corp., the nation’s largest rehabilitation company, moved toward its goal of operating in every major U.S. city, announcing the purchase of No. 2 Horizon/CMS Healthcare Corp. If the $1.6-billion stock-and-debt takeover is approved by Horizon shareholders and antitrust regulators, the combined company will have rehab centers, outpatient surgery centers and other facilities in 250 of the nation’s 300 largest cities and annual revenue of about $5 billion. Under the agreement, Horizon/CMS shareholders would receive 0.42169 share of HealthSouth for each share of their stock. That values Horizon at $18 a share, based on Friday’s closing price for HealthSouth. HealthSouth’s shares fell Tuesday by $2.125, or 5%, to close at $41. Horizon shares soared $2.25, or 16%, to close at $16.50. Both trade on the New York Stock Exchange.