Providence Service Corporation Confirms Termination of its Strategic Alternatives Review Process
TUCSON, Ariz, June 11, 2012 /PRNewswire/ -- The Providence Service Corporation ("Providence") (Nasdaq: PRSC) today announced the conclusion of a review of strategic alternatives which it was conducting with the assistance of Stifel Nicolaus Weisel. Providence's Board of Directors engaged Stifel Nicolaus Weisel as its financial advisor in late 2011 after receiving a number of unsolicited proposals to take the company private. After reviewing the alternatives, the Board has determined that the continued focus on the company's operations is currently the best alternative to maximize shareholder value and has instructed management to terminate all existing discussions concerning a potential sale of the company.
"While a good deal of interest was generated over the past several months, including expressions from both financial sponsors as well as strategic partners, we did not believe the valuation discussions regarding the proposals represented an attractive premium for our shareholders, particularly given our prospects and new business awards," stated Fletcher McCusker, Chairman and CEO. "The Board's decision reflects its conclusion that our continued focus on growing operations and profitability is currently the best alternative for maximizing shareholder value."
The company expects to record approximately $600,000 of expense related to the process in the second quarter of 2012, which was not reflected in prior company guidance.
The Providence Service Corporation, through its owned and managed entities, provides home and community based social services and non-emergency transportation services management to government sponsored clients under programs such as welfare, juvenile justice, Medicaid and corrections. Providence is different from many of its competitors in that it provides its social services primarily in the client's own home or in community based settings versus treatment facilities or hospitals and provides its NET management services through local transportation providers rather than owning its own fleet of vehicles. The Company provides a range of services through its direct entities to approximately 61,900 clients through 720 active contracts at March 31, 2012, with an approximate 12.4 million individuals eligible to receive the Company's non-emergency transportation services. Combined, the Company has an approximately $1 billion book of business including managed entities.
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "believe," "demonstrate," "expect," "estimate," "forecast," "anticipate," "should" and "likely" and similar expressions identify forward-looking statements. In addition, statements that are not historical should also be considered forward-looking statements. Readers are cautioned not to place undue reliance on those forward-looking statements, which speak only as of the date the statement was made. Such forward-looking statements are based on current expectations that involve a number of known and unknown risks, uncertainties and other factors which may cause actual events to be materially different from those expressed or implied by such forward-looking statements. These factors include, but are not limited to the global credit crisis, capital market conditions, the implementation of the healthcare reform law, state budget changes and legislation and other risks detailed in Providence's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2011. Providence is under no obligation to (and expressly disclaims any such obligation to) update any of the information in this press release if any forward-looking statement later turns out to be inaccurate whether as a result of new information, future events or otherwise.
SOURCE The Providence Service Corporation