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Cooper Plans to Shed 3 Psychiatric Hospitals

Health: The Irvine firm would focus on making contact lenses and medical equipment.

October 22, 1998|BARBARA MARSH | TIMES STAFF WRITER

Cooper Cos. said Wednesday it plans to sell three psychiatric hospitals to Pennsylvania-based Universal Health Services Inc. for $30 million.

If the deal proceeds, the Irvine company said it would take a "large write-off" related to shedding a business that last year accounted for about a third of its $141.5 million in revenue.

Cooper said the divestiture will allow it to focus on its business of making contact lenses, equipment for gynecological examinations and other biomedical devices.

The proposed sale of hospitals in New Jersey, Illinois and Indiana must be approved by boards of both companies. And final terms haven't been reached.

The sale would enable Cooper to reduce its exposure to the risky business of operating psychiatric hospitals, which are under pressure from managed-care providers to limit patient stays to hold down costs. Recently, Cooper has been trying to focus on its less risky business of making devices.

"We've said for the last two or three years that the hospital business isn't a core business for us," said Norris Battin, the company's vice president of investor relations. "This year, we started to actively seek somebody to buy the business."

Assuming the sale goes through, Cooper would be left with one Delaware hospital still on the block.

The company's operations in Orange County--its Irvine headquarters and its Huntington Beach lens-making factory--employ about 200 people. Overall, its work force totals more than 2,400.

In moderate trading Wednesday, Cooper's stock advanced 19 cents a share to close at $19.50 on the New York Stock Exchange.

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