HealthSouth Amends Agreement to Sell Long-Term Acute Care Hospitals

HealthSouth Corporation (NYSE: HLS) today announced it has entered into an amendment to the agreement dated May 17, 2011 to sell its long-term acute care hospitals to affiliates of LifeCare Holdings, Inc. The primary purpose of the amendment is to remove HealthSouth Hospital of Houston (HHH) from the transaction. As a result, HealthSouth has now agreed to sell five LTCHs to LifeCare for approximately $117.5 million instead of six LTCHs for approximately $120 million as originally agreed. The transaction remains on track to close during the third quarter of 2011, subject to customary closing conditions, including regulatory approval and third-party consents."Given the competitive challenges of operating an LTCH in the Houston market and the recently initiated OIG investigation related to HHH, HealthSouth and LifeCare agreed removing this hospital from the transaction represents the best opportunity to promptly and efficiently close the sale," said HealthSouth President and Chief Executive Officer Jay Grinney. "Consistent with our prior decision to exit the LTCH business in order to concentrate on our core inpatient rehabilitation business, we intend to close HHH in a timely manner and sell the related real estate."