RehabCare To Acquire Solara Hospital Of New Orleans
Acquisition to Expand RehabCare's Continuum of Care in New Orleans Market
St. Louis - RehabCare Group, Inc., a national provider of physical rehabilitation program management services, announced today it has entered into an agreement to acquire the operating assets of Solara Hospital of New Orleans from Solara Healthcare for a purchase price of $18.7 million. The transaction is expected to close June 1, 2006.
Solara Hospital of New Orleans is a 44-bed long-term acute care hospital (LTACH), with approximately 120 employees, located on the seventh floor of West Jefferson Medical Center in Marrero, LA, on the West Bank of Jefferson Parish. An additional 12 licensed beds are located at a satellite campus in New Orleans.
John H. Short, Ph.D., President and Chief Executive Officer of RehabCare, commented that the hospital will be a natural extension of the company's service offerings in the New Orleans area. "Our acquisition of Solara Hospital in New Orleans further expands our post-acute continuum of care in a currently underserved market, accelerates our LTACH business line and builds on a successful 10-year relationship with a well-respected community hospital," he said, referencing the company's long-term partnership with West Jefferson Medical Center.
Since 1995, RehabCare has staffed and managed West Jefferson's 22-bed inpatient rehabilitation unit, as well as the hospital's outpatient physical rehabilitation program. A third outpatient program opened in nearby Terrytown in June 2003, under the management of RehabCare. RehabCare manages four skilled nursing facility (SNF) therapy programs in New Orleans in addition to its West Jefferson operations.
The hospital, to be called West Jefferson Specialty Hospital, LLC, is one of only 18 LTACHs exempt from federal regulations that limit Medicare patient referrals from the host hospital to 25 percent of total admissions, so RehabCare anticipates the vast majority of patient referrals will come from West Jefferson. LTACHs are designed for the long-term hospitalization of patients who have chronic or catastrophic care needs and require more individualized and resource-intensive treatment than is provided in a SNF or nursing home. The average length of stay is 30 days.
"I am very pleased that this transaction is occurring between two of our valued partners," said Gary Muller, West Jefferson Chief Executive Officer, "and I have complete confidence that RehabCare will continue the stellar reputation that Solara has built as the primary long-term care solution for our patients and the residents of the West Bank." Muller commended both companies for their dedication to patient care during and in the wake of hurricane Katrina. "West Jefferson was the only hospital that remained open on the West Bank in the immediate days following Katrina, and both RehabCare and Solara were there, working alongside our staff and overcoming tremendous obstacles to continue a tradition of quality patient services."
Ken Ross, Solara Healthcare's Chief Executive Officer, explained that only the New Orleans hospital is included in the transaction and not any other hospitals owned by Solara. "This was a strategic financial decision for this particular market and does not involve our other facilities in Texas or Oklahoma," he said. "Our primary focus remains on setting the industry standards for long-term acute care hospitals."
Dr. Short stated that no significant changes are planned for the day-to-day operations of the LTACH. "Solara has put in place excellent management and clinical teams that have been delivering a high-caliber service for patients and families for several years. We look forward to their joining the RehabCare family of services and benefiting from the resources and experiences of a 24-year-old post-acute provider."
SOURCE: RehabCare Group, Inc.