When National Rehabilitation Centers agreed to acquire Healthfocus in late October, it was as if Jonah had swallowed the whale. But the stock of National Rehab, which is just a third the size of privately held Healthfocus, has become a giant winner. In just a month, its shares have climbed to 15 from 9. And the stock is now worth even more, say some pros.
What's so hot about the combo? "The acquisition makes National the largest pure play in the outpatient rehab business," says analyst Joseph Millsap of Morgan Keegan. He sees the stock climbing to 24 in a year.
Revenues for the combined companies, which provide outpatient services for injuries and disabilities, are expected to hit $115 million this year and $140 million in 1993, figures Millsap. Earnings, he estimates, will come in at 80 cents a share next year and then jump to $1.10 in 1994.
President and CEO Bill Youree says on-site services provided by National's 41 centers in 11 states are strong in private clinics. Healthfocus' main strength, on the other hand, is in servicing nursing homes and acute-care hospitals. Healthfocus owns 63 outpatient centers and services 800 nursing homes in 13 states and 75 hospitals in 27 states. "With its bigger capacity, the new National will be in a better position to serve as a regional contractor for hospitals and other health-care providers," he adds.