MINNEAPOLIS, May 9 /PRNewswire/ --
Health Fitness Corporation (OTC Bulletin Board: HFIT) today announced that
it has signed a letter of intent to merge with Healthtrax, Inc., a
Connecticut-based privately-held company that owns and/or manages (i) medical
fitness centers, (ii) work site fitness and rehab centers, and (iii) employee
wellness programs. If the merger is completed, Healthtrax would be merged
into Health Fitness, with current Healthtrax shareholders receiving Health
Fitness common stock representing approximately 50% of all Health Fitness
common stock outstanding after the merger. It is anticipated that the merged
company would be governed by a seven-person Board of Directors initially
comprised of two persons designated by each of Health Fitness and Healthtrax,
with those four designees choosing three outside directors.
The merger is subject to several conditions, including completion of
definitive agreements approved by the Board of Directors and shareholders of
each company; the merger qualifying as a pooling of interests and a tax-free
reorganization; anti-trust clearance under the HSR Act (if applicable); and
other customary conditions. Assuming these conditions are satisfied, the
merger would be expected to close in approximately September, 2000.
Charles J.B. Mitchell, Jr., acting Chief Executive Officer of HFIT said,
"We are pleased that Health Fitness' process of exploring its strategic
alternatives has resulted in a letter of intent with Healthtrax. The combined
companies should be able to achieve the critical mass necessary to pursue our
growth objectives and to better serve our clients in both the hospital and
corporate markets." Mr. Mitchell also said, "We believe that the combined
senior management teams from HealthTrax and Health Fitness Corporation can
provide excellent leadership at both the strategic and operational levels as
the Company transitions out of the arrangement under which employees of the
Manchester Companies have been providing senior management to Health Fitness."
Health Fitness Corporation of Minneapolis, Minn. manages corporate fitness
centers and hospital-based fitness centers throughout the United States and
provides a wide range of additional health and wellness services to
corporations.
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 regarding the
probability that the proposed merger with Healthtrax will be completed and the
anticipated effects of such merger. Such statements are based on the current
expectations and beliefs of management of Health Fitness 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. In
particular, the following factors, among others could cause actual results to
differ materially from those described in the forward-looking statements:
failure of the parties to negotiate and sign definitive agreements; failure of
the Health Fitness or Healthtrax shareholder to approve the merger; the risk
that the Health Fitness and Healthtrax businesses will not be integrated
successfully and unanticipated costs of such integration; failure of the
combined company to retain and hire key executives and other employees;
failure of the combined company to manage its growth and the difficulty of
successfully managing a larger, more geographically dispersed organization;
failure of the combined company to successfully manage its changing
relationships with customers; timely identification, development, acceptance
and pricing of new products and services; consummation of binding agreements
with prospective business partners, the ability to close and execute large
multi-year contracts and the impact of competitive products and services and
pricing. For a detailed discussion of these and other cautionary statements,
please refer to the proxy statement/prospectus to be filed by Health Fitness,
as well as Health Fitness' filings with the Securities and Exchange
Commission, especially Health Fitness' annual report on Form 10-K for the year
ended December 31, 1999, and other documents periodically filed with the
Securities and Exchange Commission. Health Fitness undertakes no obligation
to update or revise any forward-looking statements, whether as a result of new
information, future events, or otherwise.
Health Fitness Corporation and/or its officers and directors may be deemed
to be participants in the solicitation of proxies from Health Fitness
shareholders with respect to the proposed merger. Information regarding such
officers and directors is included in Health Fitness' annual report on Form
10-K for the year ended December 31, 1999 filed with the SEC on March 30,
2000. This document is available free of charge at the SEC website at
http://www.sec.gov and from the Health Fitness contact listed above.
THIS PRESS RELEASE IS BEING FILED PURSUANT TO RULE 425 UNDER THE
SECURITIES ACT OF 1933 AND IS DEEMED FILED PURSUANT TO RULE 14A-12 UNDER THE
SECURITIES EXCHANGE ACT OF 1934. THIS PRESS RELEASE DOES NOT CONSTITUTE AN
OFFER TO SELL SECURITIES. SHAREHOLDERS OF HEALTH FITNESS CORPORATION AND
OTHER INVESTORS ARE URGED TO READ THE PROXY STATEMENT-PROSPECTUS WHICH WILL BE
INCLUDED IN THE REGISTRATION STATEMENT ON FORM S-4 TO BE FILED BY HEALTH
FITNESS CORPORATION IN CONNECTION WITH THE MERGER BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION. AFTER SUCH DOCUMENT IS FILED, IT WILL BE AVAILABLE
FREE OF CHARGE ON THE SEC WEBSITE AT http://WWW.SEC.GOV AND FROM HEALTH FITNESS
CORPORATION THROUGH THE CONTACT LISTED ABOVE.
SOURCE Health Fitness Corporation
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Company News On-Call:
http://www.prnewswire.com/comp/000921.html or fax,
800-758-5804, ext. 000921
CONTACT:
Charlie Mitchell of Manchester Companies,
612-338-4722
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