Signaling increased consolidation in the specialty medical business, New Jersey-based Transworld Home HealthCare Inc. announced yesterday that it has signed a letter of intent to acquire 80 percent of the privately held RADAMERICA Inc., the single largest provider of radiation oncology therapy in Maryland.
Terms of the cash transaction were not disclosed.
Transworld, a $16 million home health firm catering to cancer patients, said the acquisition gives it the expertise to add radiation therapy centers to the services it now offers patients in New York, New Jersey and Florida.
Both companies said RADAMERICA's four owner-managers would continue to run the company and direct the growth of cancer therapies at locations along the East Coast.
The acquisition is expected to add a full range of services, including home nursing and equipment rental, for cancer patients at RADAMERICA's five freestanding centers in the Baltimore area.
The centers compete for patients with more expensive hospital-based oncology services. One hospital, Greater Baltimore Medical Center, recently blamed freestanding facilities for draining patients when it announced layoffs of staff in its oncology department. Another chain, Oncology Associates of State College, Pa., also operates independent centers in Maryland.
Joseph J. Raymond, Transworld president and chief executive officer, said yesterday that expanded services in all its markets makes the home health company more attractive to managed-care companies. He said Transworld would get "its head battered" if it continued to offer only one of several cancer therapies available. The company now offers at-home respiratory therapy and chemotherapy as well as nursing services.
Chemotherapy and radiation therapy are the two main treatments for cancer besides surgery. Mr. Raymond said his company now will research what at-home services it can provide patients who undergo another cancer treatment, bone marrow transplants.
"Doctors in the Baltimore area are high-tech, and the management we picked up is extremely good, so if they are not content with radiation therapy . . . we will provide them the finances to grow that area," he said.
Transworld stock was last bid at $4.375, up 18 3/4 cents, in Nasdaq trading after news of the announcement. The fast-growing Wall, N.J., company specializes in at-home services for cancer patients and first sold shares to the public in December 1992. It had sales for the year ended Oct. 31, 1993, of $16.3 million. Net income for the same period was $945,000.
RADAMERICA had revenues of $10.3 million last year. It was founded by oncologist Seymour Weiner in 1974.
RADAMERICA's five centers are near or in rented space on the campuses of Franklin Square, Good Samaritan, Mercy, North Arundel and St. Joseph hospitals.