Two national providers of healthcare services to correctional institutions have announced plans to merge.
St. Louis-based Valitás Health Services, the parent company of Correctional Medical Services, plans to join forces with the Tennessee-based America Service Group, the parent company of PHS Correctional Healthcare, Inc.
Valitás will acquire the America Service Group for about $250 million, at $26 per share.
The combined company will have about 11,000 employees and independent contractors, serving more than 400 correctional facilities. The boards of directors of each company have unanimously agreed to the merger, but the transaction must be approved by stockholders of America Service Group and other regulatory bodies. Valitás has committed financing for the purchase, which is expected to close in the second quarter of 2011.
“This combination will be good for the state and local governments we serve, providing them with greater access to outstanding talent and expertise in the specialized field of correctional healthcare,” said Richard H. Miles, Valitás’ chairperson and chief executive officer, in a statement. “We are creating a team with best-in-class experience, staffing depth and leadership. Our existing and future clients will benefit from the quality of this team.”
“We believe this combination creates a new organization that will bring together the best people in our industry to serve our clients and patients and provides the best value to states and counties seeking to wisely use taxpayer dollars by privatizing their correctional healthcare facilities,” added Rich Hallworth, president and CEO of the America Service Group. “The new company will have enhanced scale, broad service offerings, industry leading clinical approaches and growth opportunities for our employees.”
The operational headquarters for the merged company will be in St. Louis, while the corporate headquarters will be in Brentwood, Tenn.
Richard Miles will become the non-executive chairman of the board of directors, and Rich Hallworth will serve as the CEO. Stuart Campbell, currently president and chief operating officer of Valitás and CMS, will be president and chief operating officer of the combined company. Michael Taylor, currently executive vice president and chief financial officer of America Service Group, is expected to become executive vice president and CFO of the combined company.