NextHealth, Inc. and Management Group Announce Merger Agreement To Take Company Private

Apr 16, 2001, 01:00 ET from NextHealth, Inc.

    TUCSON, Ariz., April 16 /PRNewswire/ -- NextHealth, Inc. (Nasdaq:   NEXT)
 (the "Company") and Anam LLC, an entity controlled by William T. O'Donnell,
 Jr., the Company's Chairman and Chief Executive Officer and George L. Ruff, a
 Director of the Company, announced today that they have entered into a
 definitive Agreement and Plan of Merger (the "Merger Agreement") pursuant to
 which Anam would acquire all of the outstanding capital stock of the Company.
 Under the terms of the Merger Agreement, the Company's stockholders (other
 than Anam and its subsidiaries) will receive cash in the amount of $5.65 per
 share of outstanding common stock (including shares of common stock issuable
 upon conversion of outstanding preferred stock).  In addition, all unexercised
 Company employee and director options and outstanding warrants will be
 converted into a right to receive cash in the amount of $5.65 (less the
 applicable exercise price) for each share of common stock issuable upon the
 exercise of such options and warrants.
     The Company's Board of Directors unanimously approved the Merger Agreement
 and the transactions contemplated thereby based upon the unanimous
 recommendation of a Special Committee of the Board and the receipt of an
 opinion from Prudential Securities Incorporated that the merger consideration
 to be received by the Company's stockholders pursuant to the Merger Agreement
 is fair to such stockholders (other than Anam and its controlling affiliates)
 from a financial point of view.  The Special Committee of the Board is
 composed exclusively of directors with no financial interest in the merger
 that is different from the interests of the Company's stockholders generally.
     Closing of the merger is subject to the approval of the Company's
 stockholders, customary regulatory approvals and the completion of Anam's
 financing for the merger.  The Merger Agreement also contains customary
 non-solicitation provisions and termination fee provisions.  Consistent with
 its fiduciary duties and subject to the terms of the Merger Agreement, the
 Company's Board of Directors has reserved its ability to respond to third
 parties where appropriate.  The parties currently expect the merger to be
 consummated in the summer of 2001.
     Anam has deposited a letter of credit in the amount of $2,500,000 into an
 escrow account as security for the performance of its obligations under the
 Merger Agreement.  In the event the Company accepts a third party offer or the
 Merger Agreement is terminated following the occurrence of certain other
 events set forth in the Merger Agreement, Anam will be entitled to receive
 payments in an aggregate amount of up to $2,400,000 and the return of its
 deposit.
 
     NOTICE TO READ PROXY STATEMENT: A proxy statement will be filed by the
 Company with the Securities and Exchange Commission ("SEC").  Stockholders are
 urged to read the proxy statement and any other relevant documents to be filed
 with SEC, which will contain important information that should be considered
 before a decision is made regarding the merger.  The Company and its directors
 and executive officers may be deemed to be participants in the solicitation of
 proxies from the stockholders in favor of the merger.  The merger will be
 subject to the "going private" rules and regulations of the SEC.  Proxy
 statements will be mailed to each stockholder with the notice of the
 stockholder meeting to be held for the purpose of voting upon the merger.  In
 addition, when available, stockholders may obtain a free copy of the proxy
 statement and other documents filed by the Company with the SEC at the SEC's
 web site www.sec.gov or from the Company by contacting the corporate
 secretary, Bertha Kenny (520.818.5811).
 
     This press release contains forward-looking statements regarding plans and
 expectations for the future.  Statements looking forward in time are included
 in this press release pursuant to the "safe harbor" provision of the Private
 Securities Litigation Reform Act of 1995.  These statements are based on the
 Company's current expectations or beliefs and are subject to a number of
 factors and uncertainties that could cause actual results to differ materially
 from those described in the forward-looking statements.  The factors that
 could cause actual results to differ materially from those described in the
 forward-looking statements include: the failure of the Company's stockholders
 to approve the merger, and other reasons that could cause the Merger Agreement
 to terminate in accordance with its terms (including Anam's inability to
 complete the financing for the merger); competition from other resort
 hotel/spas and/or behavioral health facilities; seasonality; or an economic
 downturn that could limit leisure activity spending.  Further, the Company
 operates in an industry sector where securities values may be volatile and may
 be influenced by economic and other factors beyond the Company's control.  In
 the context of the forward-looking information provided in this press release
 and in other reports, please refer to the discussions of Factors That May
 Affect Future Results detailed in the Management's Discussion and Analysis of
 Financial Condition and Results of Operations included in the Company's annual
 report on Form 10-K for the year ended December 31, 2000.
 
     For further information please contact Loree Thompson, Chief Financial
 Officer of NextHealth, Inc., 520-818-5800; or Anna Caston, Prudential
 Securities Incorporated, (the Financial Advisor to the Special Committee),
 212-778-8672, for NextHealth, Inc.
 
 

SOURCE NextHealth, Inc.
    TUCSON, Ariz., April 16 /PRNewswire/ -- NextHealth, Inc. (Nasdaq:   NEXT)
 (the "Company") and Anam LLC, an entity controlled by William T. O'Donnell,
 Jr., the Company's Chairman and Chief Executive Officer and George L. Ruff, a
 Director of the Company, announced today that they have entered into a
 definitive Agreement and Plan of Merger (the "Merger Agreement") pursuant to
 which Anam would acquire all of the outstanding capital stock of the Company.
 Under the terms of the Merger Agreement, the Company's stockholders (other
 than Anam and its subsidiaries) will receive cash in the amount of $5.65 per
 share of outstanding common stock (including shares of common stock issuable
 upon conversion of outstanding preferred stock).  In addition, all unexercised
 Company employee and director options and outstanding warrants will be
 converted into a right to receive cash in the amount of $5.65 (less the
 applicable exercise price) for each share of common stock issuable upon the
 exercise of such options and warrants.
     The Company's Board of Directors unanimously approved the Merger Agreement
 and the transactions contemplated thereby based upon the unanimous
 recommendation of a Special Committee of the Board and the receipt of an
 opinion from Prudential Securities Incorporated that the merger consideration
 to be received by the Company's stockholders pursuant to the Merger Agreement
 is fair to such stockholders (other than Anam and its controlling affiliates)
 from a financial point of view.  The Special Committee of the Board is
 composed exclusively of directors with no financial interest in the merger
 that is different from the interests of the Company's stockholders generally.
     Closing of the merger is subject to the approval of the Company's
 stockholders, customary regulatory approvals and the completion of Anam's
 financing for the merger.  The Merger Agreement also contains customary
 non-solicitation provisions and termination fee provisions.  Consistent with
 its fiduciary duties and subject to the terms of the Merger Agreement, the
 Company's Board of Directors has reserved its ability to respond to third
 parties where appropriate.  The parties currently expect the merger to be
 consummated in the summer of 2001.
     Anam has deposited a letter of credit in the amount of $2,500,000 into an
 escrow account as security for the performance of its obligations under the
 Merger Agreement.  In the event the Company accepts a third party offer or the
 Merger Agreement is terminated following the occurrence of certain other
 events set forth in the Merger Agreement, Anam will be entitled to receive
 payments in an aggregate amount of up to $2,400,000 and the return of its
 deposit.
 
     NOTICE TO READ PROXY STATEMENT: A proxy statement will be filed by the
 Company with the Securities and Exchange Commission ("SEC").  Stockholders are
 urged to read the proxy statement and any other relevant documents to be filed
 with SEC, which will contain important information that should be considered
 before a decision is made regarding the merger.  The Company and its directors
 and executive officers may be deemed to be participants in the solicitation of
 proxies from the stockholders in favor of the merger.  The merger will be
 subject to the "going private" rules and regulations of the SEC.  Proxy
 statements will be mailed to each stockholder with the notice of the
 stockholder meeting to be held for the purpose of voting upon the merger.  In
 addition, when available, stockholders may obtain a free copy of the proxy
 statement and other documents filed by the Company with the SEC at the SEC's
 web site www.sec.gov or from the Company by contacting the corporate
 secretary, Bertha Kenny (520.818.5811).
 
     This press release contains forward-looking statements regarding plans and
 expectations for the future.  Statements looking forward in time are included
 in this press release pursuant to the "safe harbor" provision of the Private
 Securities Litigation Reform Act of 1995.  These statements are based on the
 Company's current expectations or beliefs and are subject to a number of
 factors and uncertainties that could cause actual results to differ materially
 from those described in the forward-looking statements.  The factors that
 could cause actual results to differ materially from those described in the
 forward-looking statements include: the failure of the Company's stockholders
 to approve the merger, and other reasons that could cause the Merger Agreement
 to terminate in accordance with its terms (including Anam's inability to
 complete the financing for the merger); competition from other resort
 hotel/spas and/or behavioral health facilities; seasonality; or an economic
 downturn that could limit leisure activity spending.  Further, the Company
 operates in an industry sector where securities values may be volatile and may
 be influenced by economic and other factors beyond the Company's control.  In
 the context of the forward-looking information provided in this press release
 and in other reports, please refer to the discussions of Factors That May
 Affect Future Results detailed in the Management's Discussion and Analysis of
 Financial Condition and Results of Operations included in the Company's annual
 report on Form 10-K for the year ended December 31, 2000.
 
     For further information please contact Loree Thompson, Chief Financial
 Officer of NextHealth, Inc., 520-818-5800; or Anna Caston, Prudential
 Securities Incorporated, (the Financial Advisor to the Special Committee),
 212-778-8672, for NextHealth, Inc.
 
 SOURCE  NextHealth, Inc.