MATRIA HEALTHCARE, INC.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
January 19, 2006
Date of Report (Date of earliest event reported)
Matria Healthcare, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
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0-20619
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20-2091331 |
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(Commission File Number)
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(IRS Employer Identification No.) |
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1850 Parkway Place, Marietta, GA
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30067 |
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(Address of Principal Executive Offices)
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(Zip Code) |
770-767-4500
(Registrants Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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Item 1.01 |
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Entry into a Material Definitive Agreement. |
On January 19, 2006, the registrant, Matria Healthcare, Inc. (Matria) completed its
acquisition of CorSolutions Medical, Inc., a Delaware corporation (CorSolutions) pursuant
to the Agreement and Plan of Merger (the Merger Agreement), dated as of December 14,
2005, by and among Matria, Coral Acquisition Corp. (Merger Sub), an indirect wholly owned
subsidiary of Matria, and CorSolutions. CorSolutions is a leading provider of disease management
services to employers, health plans and government-sponsored healthcare programs.
Pursuant to the Merger Agreement, Merger Sub merged with and into CorSolutions (the
Merger), with CorSolutions continuing as the surviving corporation and as a wholly owned
subsidiary of Matria.
In
the Merger, all outstanding capital stock and options and warrants to purchase capital stock
of CorSolutions were converted into the right to receive a pro rata portion of the initial merger
consideration, which was approximately $445 million. Of this amount, $20.3 million will be held in escrow (the Escrow Amount)
for a period of up to 24 months to satisfy any potential indemnification claims which may be made
by Matria under the terms of the Merger Agreement. Except as to certain specified matters, Matria
will only be permitted to recover damages from the Escrow Amount if such damages exceed $4,500,000.
Matria funded the Merger with the proceeds of term loans and revolving credit loans pursuant
to a credit agreement with Bank of America, N.A., as administrative agent and collateral agent (the
First Lien Credit Facility), and with the proceeds of a second lien term loan facility
pursuant to a term loan agreement with Bank of America, N.A., as administrative agent and
collateral agent (the Second Lien Credit Facility and, together with the First Lien
Credit Facility, the New Credit Facilities). The New Credit Facilities are described in
more detail in Item 2.03 below. The information set forth under Item 2.03 of this Current Report
is hereby incorporated in this Item 1.01 by reference.
Matria issued a press release on January 19, 2006, announcing the completion of the Merger.
The press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
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Item 2.01 |
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Completion of Acquisition or Disposition of Assets. |
The information set forth under Item 1.01 of this Current Report is hereby incorporated in
this Item 2.01 by reference.
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Item 2.03 |
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
On January 19, 2006, Matria entered into the New Credit Facilities with Bank of America, N.A.,
as administrative agent and collateral agent, and the lenders from time to time party thereto. The
New Credit Facilities provide for borrowings of up to an aggregate of $485,000,000, which includes
both term loans and a revolving credit facility. The New Credit Facilities replaced Matrias
existing revolving credit facility with HFG Healthco-4 LLC.
The First Lien Credit Facility consists of a $245 million Term Loan B facility (the Term
B Facility), a $125 million Term Loan C facility (the Term C Facility), and a $30
million revolving credit facility (the Revolving Credit Facility). The maturity date for
the Term B Facility is January 19, 2012; the maturity date for the Term C Facility is January 19,
2007, and the maturity date for the Revolving Credit Facility is January 19, 2011. The terms and
conditions of the First Lien Credit Facilities are contained in the Credit Agreement, dated January
19, 2006 (the Credit Agreement), by and among Matria, certain of its domestic
subsidiaries, as guarantors, the lenders from time to time party thereto, and Bank of America,
N.A., as issuing bank, swingline lender, administrative agent and collateral agent, a copy of which
is attached hereto as Exhibit 10.1. Amounts borrowed under the Term B Facility and the Term C
Facility accrue interest at a fixed spread over the Eurodollar Rate. Amounts borrowed under the
Revolving Credit Facility accrue interest at a variable spread over the Eurodollar Rate, with the
applicable spread determined by reference to Matrias consolidated leverage ratio, as described in
the Credit Agreement.
The Second Lien Credit Facility consists of an $85 million second lien term loan facility.
The maturity date for the Second Lien Credit Facility is July 19, 2012. The terms and conditions
of the Second Lien Credit Facility are contained in the Term Loan Agreement, dated January 19, 2006
(the Term Loan Agreement), by and among Matria, certain of its domestic subsidiaries, as
guarantors, the lenders from time to time party thereto, and Bank of America, N.A., as
administrative agent and collateral agent, a copy of which is attached hereto as Exhibit 10.2.
Amounts borrowed under the Second Lien Credit Facility accrue interest at a fixed spread over the
Eurodollar Rate.
The Credit Agreement and the Term Loan Agreement are collectively referred to herein as the
Facility Agreements Amounts borrowed under the New Credit Facilities are fully and
unconditionally guaranteed on a joint and several basis by substantially all of the subsidiaries of
Matria. Amounts borrowed under the First Lien Credit Facility are secured by a first priority lien
on substantially all of the assets of Matria and the subsidiary guarantors, and amounts borrowed
under the Second Lien Credit Facility are secured by a second priority lien on such assets.
The Facility Agreements contain various representations, warranties and affirmative, negative
and financial covenants customary for financings of this type. The negative covenants include,
without limitation, certain limitations on transactions with affiliates; liens; the incurrence of
debt, sales of assets; and changes in business. The financial covenants contained in both of the
Financing Agreements include a
consolidated leverage ratio and a consolidated fixed charges coverage ratio. The Credit Agreement
also contains a consolidated first lien leverage ratio.
The Facility Agreements also contain customary events of default, including without limitation
events of default arising out of nonpayment of principal, interest, or fees; material
misrepresentations; default in the performance of any negative or financial covenant; default in
performance of any other term or covenant for 30 days; bankruptcy or insolvency; unstayed
judgments; or cross-defaults to monetary default of other indebtedness. If an event of default
occurs, the lenders may terminate the commitment to make revolving credit loans under the Credit
Agreements and declare the amounts outstanding under the New Credit Facilities, including all
principal, accrued interest and unpaid fees, payable immediately.
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Item 9.01 |
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Financial Statements and Exhibits. |
(a) |
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Financial Statements of Businesses Acquired. |
The audited financial statements of CorSolutions required to be filed will be filed by
amendment to this Current Report not later than 71 days following the date this Current Report is
required to be filed with the Securities and Exchange Commission.
(b) |
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Pro Forma Financial Information. |
The pro forma financial statements of Matria giving effect to the acquisition of CorSolutions
required to be filed will be filed by amendment to this Current Report not later than 71 days
following the date this Current Report is required to be filed with the Securities and Exchange
Commission.
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10.1 |
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Credit Agreement, dated January 19, 2006, by and among Matria,
certain of its domestic subsidiaries, as guarantors and Bank of
America, N.A. as issuing bank, swingline lender, administrative agent
and collateral agent |
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10.2 |
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Term Loan Agreement, dated January 19, 2006, by and among Matria,
certain of its domestic subsidiaries, as guarantors and Bank of
America, N.A. as administrative agent and collateral agent |
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99.1 |
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Press Release, dated January 19, 2006 |
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
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MATRIA HEALTHCARE, INC.
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By: |
/s/ Parker H. Petit
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Parker H. Petit |
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Chairman and Chief Executive Officer |
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Dated:
January 25, 2006
Exhibit Index
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10.1
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Credit Agreement, dated January 19, 2006, by and among Matria,
certain of its domestic subsidiaries, as guarantors and Bank of
America, N.A. as issuing bank, swingline lender, administrative agent
and collateral agent |
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10.2
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Term Loan Agreement, dated January 19, 2006, by and among Matria,
certain of its domestic subsidiaries, as guarantors and Bank of
America, N.A. as administrative agent and collateral agent |
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99.1
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Press Release, dated January 19, 2006 |