LOCAL HEALTHSOUTH CENTER NOT AFFECTED BY PURCHASE

The planned acquisition of Horizon/CMS Healthcare Corp. by HealthSouth Corp. will have no immediate effect on services provided by HealthSouth Rehabilitation Center in Cape Girardeau.

HealthSouth Corp., the nation's leading medical rehabilitation company, is buying No. 2 Horizon/CMS Healthcare Corp. for about $950 million in stock.

Sharon Urhahn, marketing director for HealthSouth Rehabilitation Center of Cape Girardeau, said the buyout will give HealthSouth more national resources.

"Immediately, our day-to-day operations will stay the same," Urhahn said. "It's not going to help us out here immediately, but in the long-run I think it will. It will make our company stronger as a whole."

HealthSouth, based in Birmingham, Ala., has more than 1,000 patient care locations in 50 states and is a leading provider of outpatient surgery as well as rehabilitation services.

By buying Albuquerque, N.M.-based Horizon/CMS, it gains 33 inpatient rehabilitation hospitals, 58 specialty hospitals and units for minor care and 282 outpatient rehabilitation locations. Horizon/CMS also owns, leases or manages 267 nursing homes, a contract therapy business, an institutional pharmacy business and other health care services.

None of the facilities being acquired are in Southeast Missouri, Urhahn said.

Under the deal, Horizon/CMS shareholders would receive 0.42169 share of HealthSouth for each share of their stock, valued at about $950 million based on Friday's closing price.

In addition, HealthSouth would assume about $700 million in Horizon/CMS debt, raising the value of the deal to about $1.6 billion.

Completion of the takeover is subject to federal antitrust review and approval of Horizon/CMS shareholders. The companies said they expect the deal to be concluded by midyear.

The acquisition will boost HealthSouth's ability to sell its services to insurers, managed care plans and self-insured employers, said Richard M. Scrushy, the chairman and chief executive of HealthSouth.

"The management of Horizon/CMS considers this an excellent opportunity for its stockholders to participate in the growth that lies ahead in the new health care environment," said Neal M. Elliott, the chairman and chief executive of Horizon/CMS.

Elliott will join HealthSouth's board once the takeover is completed.

Horizon/CMS has had its share of problems. In December, it settled a federal fraud investigation by reimbursing the government $4.6 million in questionable payments. Earlier, it made $1.1 million in repayments to the government in the investigation of billings it made to the Medicare and Medicaid health insurance programs.

The company has maintained that any overbillings were a mistake.

The Associated Press contributed to this story.