hs424b7.htm
Prospectus
Supplement No. 1
|
Filed
Pursuant to Rule 424(b)(7)
|
(To
Prospectus dated May 3, 2007)
|
Registration
No. 333-141688
|
HealthSouth
Corporation
400,000
Shares of 6.50% Series A Convertible Perpetual Preferred
Stock
10,000,000
Warrants to Purchase Shares of Common Stock
and
15,114,760
Shares of Common Stock
This
prospectus supplement supplements and amends the prospectus dated May 3, 2007
(as supplemented or amended, the “Prospectus”) of HealthSouth Corporation (the
“Company”), relating to the sale by certain of the Company’s securityholders of
up to $400,000,000 aggregate principal amount of the Company’s 6.50% Series A
Convertible Perpetual Preferred Stock (the “Series A Preferred Stock”), up to
10,000,000 warrants (the “Warrants”) to purchase shares of the Company’s common
stock, par value $0.01 per share (the “common stock”), and 15,114,760 shares of
the Company’s common stock, 13,114,760 of which are issuable upon conversion of
the Series A Preferred Stock and 2,000,000 of which are issuable upon exercise
of the Warrants. The Series A Preferred Stock, the Warrants and the
shares of common stock issuable upon conversion of the Series A Preferred Stock
and issuable upon exercise of the Warrants are collectively referred to in
the
Prospectus as the “offered securities.” Unless otherwise stated
herein or the context otherwise requires, the terms “HealthSouth,” “we,” “us,”
“our” and the “Company” refer to HealthSouth Corporation and its
subsidiaries.
You
should read this prospectus supplement in conjunction with the
Prospectus. This prospectus supplement is not complete without, and
may not be delivered or used except in conjunction with, the
Prospectus. This prospectus supplement is qualified by reference to
the Prospectus, except to the extent that the information in this prospectus
supplement supplements or supersedes the information contained in the prospectus
dated May 3, 2007.
Investing
in the offered securities involves risks that are described in the “Risk
Factors” section beginning on page 9 of the Prospectus.
Neither
the Securities and Exchange Commission (the “SEC”) nor any state securities
commission has approved or disapproved of these securities or determined if
this
prospectus supplement is truthful or complete. Any representation to the
contrary is a criminal offense.
The
date of this prospectus supplement is September 25, 2007.
SELLING
SECURITYHOLDERS
The
following tables supplement and amend the tables of Selling Securityholders
and
related footnotes appearing under the heading “Selling Securityholders”
beginning on page 17 of the Prospectus by adding to the table contained in
the
Prospectus the information below with respect to selling securityholders not
previously listed in the Prospectus and by superseding the information with
respect to certain selling securityholders previously listed in the Prospectus
with the information that is set forth below.
Series
A Preferred Stock
The
selling securityholders listed below and the beneficial owners of the Series
A
Preferred Stock and their transferees, pledgees, donees or other successors,
if
not identified in this prospectus supplement or the Prospectus then so
identified in additional supplements to the Prospectus or in an amendment to
the
registration statement of which the Prospectus forms a part, as required, are
the “Preferred Selling Securityholders” under the Prospectus.
The
following table sets forth for each Preferred Selling Securityholder listed
below, as of a recent practicable date prior to the filing of this prospectus
supplement with the SEC:
·
|
the
name of the Preferred Selling
Securityholder;
|
·
|
the
number of shares of Series A Preferred Stock and common stock beneficially
owned by each Preferred Selling Securityholder prior to the
offering;
|
·
|
the
number of shares of Series A Preferred Stock and common stock registered
for sale for the account of each Preferred Selling Securityholder
under
the Prospectus; and
|
·
|
the
number and percent of shares of Series A Preferred Stock and common
stock
to be beneficially owned by each Preferred Selling Securityholder
after
completion of the offering (assuming all of the shares covered hereby
are
sold by each Preferred Selling
Securityholder).
|
The
information is based on information provided by or on behalf of the Preferred
Selling Securityholders to us in Preferred Selling Securityholder questionnaires
and is as of the date specified by the holders of the questionnaires. We have
not sought to verify the information contained in the table. Because the
Preferred Selling Securityholders may offer all or some portion of these
securities pursuant to the Prospectus, and because we are not currently aware
of
any agreements, arrangements or understandings with respect to the sale of
these
securities, we cannot predict the number of shares or principal amount of the
securities that will be held by the selling securityholders upon termination
of
this offering. In addition, some of the selling securityholders may have sold,
transferred or otherwise disposed of all or a portion of their securities since
the date on which they provided the information about themselves and the
securities they were selling pursuant to the Prospectus or in transactions
exempt from the registration requirements of the Securities Act.
Unless
otherwise disclosed in the footnotes to the table below, no Preferred Selling
Securityholder listed below has, or within the past three years has had, any
position, office or other material relationship with us or any of our
predecessors or affiliates.
|
Series
A Preferred Stock
|
|
Common
Stock
|
Name
|
(a)
Number
of Shares Beneficially Owned Prior to Offering
|
(b)
Number
of Shares that may be Offered Hereby (1)
|
(c)
Number
of Shares to be Owned After Completion of the Offering
(2)
|
(d)
Percent
of Shares Beneficially Owned After the Offering
(2)
|
|
(e)
Number
of Shares Beneficially Owned Prior to Offering
|
(f)
Number
of Shares that may be Offered Hereby (1) (3)
|
(g)
Number
of Shares to be Owned After Completion of the Offering
(2)
|
(h)
Percent
of Shares Beneficially Owned After the Offering
(4)
|
|
|
|
|
|
|
|
|
|
|
Elite
Classic Convertible Arbitrage Ltd.
|
950
|
950
|
0
|
*
|
|
31,147
|
31,147
|
0
|
*
|
Xavex
Convertible Arbitrage 2 Fund
|
880
|
880
|
0
|
*
|
|
28,852
|
28,852
|
0
|
*
|
Xavex
Convertible Arbitrage 10 Fund
|
1,580
|
1,580
|
0
|
*
|
|
51,803
|
51,803
|
0
|
*
|
Van
Kampen Equity Income Fund
|
33,800
|
33,800
|
0
|
*
|
|
1,108,196
|
1,108,196
|
0
|
*
|
US
Allianz Equity Income Fund
|
660
|
660
|
0
|
*
|
|
21,639
|
21,639
|
0
|
*
|
UIF
Equity Income Fund
|
1,135
|
1,135
|
0
|
*
|
|
37,213
|
37,213
|
0
|
*
|
Tamalpais
Asset Management, L.P.
|
7,500
|
7,500
|
0
|
*
|
|
245,901
|
245,901
|
0
|
*
|
SSI
Hedge Convertible Income Fund
|
283
|
283
|
0
|
*
|
|
9,278
|
9,278
|
0
|
*
|
Citigroup
Global Markets Inc. (5)
|
5,500
|
5,500
|
0
|
*
|
|
180,327
|
180,327
|
0
|
*
|
DBAG
London (6)
|
107,300
|
107,300
|
0
|
*
|
|
3,518,032
|
3,518,032
|
0
|
*
|
All
other holders of Series A Preferred Stock (and future transferees,
distributees, pledgees, donees or successors of such holders) (7)
(8)
|
8,496
|
8,496
|
0
|
*
|
|
278,557
|
278,557
|
0
|
*
|
________________________
* Less
than 1%.
(1) Unless
otherwise indicated, each Preferred Selling Securityholder may offer any or
all
of the Series A Preferred Stock it beneficially owns and any of the common
stock
issuable upon conversion of the Series A Preferred Stock.
(2) Assumes
the sale of all shares of Series A Preferred Stock and common stock offered
pursuant to the Prospectus.
(3) Assumes
conversion of all of the Preferred Selling Securityholders’ shares of Series A
Preferred Stock at the conversion rate of 32.786885 shares of common stock
per
share of Series A Preferred Stock. This conversion rate is subject to certain
adjustments as described in the Series A Preferred Stock certificate of
designations. Accordingly, the number of shares of common stock that may be
issued upon conversion of the Series A Preferred Stock may be adjusted from
time
to time. Fractional shares will not be issued upon conversion of the Series
A
Preferred Stock. Cash will be paid instead of fractional shares, if any. Assumes
that no dividends on Series A Preferred Stock will be paid in shares of common
stock.
(4) This
percentage is calculated using as the numerator the number of shares of common
stock included in column (g) and as the denominator 78,730,353 shares of common
stock issued and outstanding, net of treasury shares, on July 31, 2007, plus
the
number of shares of common stock issuable upon conversion of the Series A
Preferred Stock held by the Preferred Selling Securityholders included in column
(f).
(5) Citigroup
Global Markets Inc. (“Citi”) served as joint bookrunner for the Series A
Preferred Stock and was also an Initial Purchaser of our 10.75% senior notes
due
2016 and our floating rate senior notes due 2014. Citi also served as
a co-lead arranger and joint bookrunner under our Term Loan Agreement, dated
as
of June 15, 2005, and received customary fees in connection
therewith. In addition, an affiliate of Citi served as syndication
agent under our Term Loan Agreement, dated as of June 15, 2005, and under both
our Credit Agreement and Interim Loan Agreement, each dated March 10, 2006,
and,
in each instance, received customary fees in connection therewith.
(6) An
affiliate of DBAG London (“DBAG”), Deutsche Bank Securities Inc., served as (i)
financial advisor in connection with the divestiture, completed in July, 2007,
of our diagnostic division to The Gores Group, (ii) co-documentation agent
with
respect to our Credit Agreement, dated March 10, 2006 (our “Senior Secured
Credit Facility”), and our 10.75% senior notes due 2016 and floating rate senior
notes due 2014, and (iii) arranger for our Amended and Restated Credit
Agreement, dated as of March 21, 2005, and, in each case, received customary
fees in connection therewith. Another affiliate of DBAG, Deutsche
Bank Trust Company Americas, served as a lender under our Senior Secured Credit
Facility and as documentation agent under our Amended and Restated Credit
Agreement, dated as of March 21, 2005, and, in each case, received customary
fees in connection therewith. Deutsche Bank AG, Cayman Islands Branch, an
affiliate of DBAG, served as co-documentation agent for our Interim Loan
Agreement, dated as of March 10, 2006, and received customary fees in connection
therewith. Deutsche Bank AG, New York Branch, an affiliate of DBAG,
served as a lender under our Senior Secured Credit Facility, as amended, and
received customary fees in connection therewith.
(7) Information
concerning other Preferred Selling Securityholders will be set forth in
additional prospectus supplements if and when necessary. Totals in these columns
may exceed the number of shares of Series A Preferred Stock and common stock
offered by the Prospectus as a result of the Preferred Selling Securityholders
identified above having sold, transferred or otherwise disposed of some or
all
of their shares of Series A Preferred Stock since the date on which the
information in the preceding table was provided to us without informing us
of
such sale(s). In no event will the number of shares of Series A Preferred Stock
offered by the Prospectus exceed 400,000 shares. Similarly, the total number
of
shares of our common stock issuable upon the conversion of all the Series A
Preferred Stock may increase or decrease due to adjustments to the conversion
rate. Pursuant to Rule 416 under the Securities Act, the registration statement
of which the Prospectus forms a part also covers any additional shares of our
common stock which become issuable in connection with such shares because of
any
stock dividend, stock split, recapitalization or other similar event or
adjustment in the number of shares issuable as provided by the terms of the
Series A Preferred Stock.
(8) Assumes
that all other holders of Series A Preferred Stock (and future transferees,
pledgees, donees or successors of such holders) do not beneficially own any
shares of our common stock other than the shares issuable upon conversion of
the
Series A Preferred Stock.
Warrants
The
selling securityholders listed
below and their transferees, pledgees, donees or other successors, if not
identified in this prospectus supplement or the Prospectus then so identified
in
additional supplements to the Prospectus or in an amendment to the registration
statement of which the Prospectus forms a part, as required, are the “Warrant
Selling Securityholders” under the Prospectus, and, together with the Preferred
Selling Securityholders, the “Selling Securityholders.”
The
following table sets forth for each
Warrant Selling Securityholder listed below, as of a recent practicable date
prior to the filing of this prospectus supplement with the SEC:
·
|
the
name of each Warrant Selling
Securityholder;
|
·
|
the
number of Warrants and the number of shares of our common stock issuable
upon exercise that may be sold by the Warrant Selling Securityholders;
and
|
·
|
the
number and percent of shares of common stock to be beneficially owned
by
each Warrant Selling Securityholder before and after the
offering.
|
The
information is based on information
provided by or on behalf of the Warrant Selling Securityholders to us in Warrant
Selling Securityholder questionnaires and is as of the date specified by the
holders of the questionnaires. We have not sought to verify the information
contained in the table. Because the Warrant Selling Securityholders may offer
all or some portion of these securities pursuant to the Prospectus, and because
we are not currently aware of any agreements, arrangements or understandings
with respect to the sale of these securities, we cannot predict the number
of
shares or principal amount of the securities that will be held by the selling
securityholders upon termination of this offering. In addition, some of the
Warrant Selling Securityholders may have sold, transferred or otherwise disposed
of all or a portion of their securities since the date on which they provided
the information about themselves and the securities they were selling pursuant
to the Prospectus or in transactions exempt from the registration requirements
of the Securities Act.
Unless
otherwise disclosed in the
footnotes to the table below, no Warrant Selling Securityholder listed below
has, or within the past three years has had, any position, office or other
material relationship with us or any of our predecessors or
affiliates.
|
|
|
|
|
|
|
Name
|
Number
of Warrants Beneficially Owned Prior to Offering
|
Number
of Warrants that may be Offered Hereby (1)
|
Percentage
of Outstanding Warrants
|
Shares
of Common Stock Beneficially Owned Prior to Offering
__________________________
|
Shares
of Common Stock Beneficially Owned After Offering
__________________________
|
|
|
|
|
Number
|
Percent
(2)
|
Number
|
Percent
(2)
|
|
|
|
|
|
|
|
|
Canpartners
Investment IV LLC (3)
|
422,535
|
422,535
|
4.2%
|
0
|
*
|
0
|
*
|
|
|
|
|
|
|
|
|
All
other holders of the Warrants (and future transferees, distributees,
pledgees, donees or successors of such holders) (4) (5)
|
7,324,198
|
7,324,198
|
73.2%
|
--
|
--
|
--
|
--
|
|
|
|
|
|
|
|
|
____________________
* Less
than 1%.
(1) Assumes
exercise of the entire amount of Warrants held by the Warrant Selling
Securityholder at a rate of one-fifth of a share of our common stock per
Warrant. The number of shares of common stock issuable upon exercise of the
Warrants may be adjusted under circumstances described in the Prospectus under
the heading “Description of Warrants—Adjustments.” Under the terms of the
Warrants, cash will be paid instead of issuing any fractional
shares.
(2) This
percentage is calculated using as the numerator the number of shares of common
stock included in the previous column and as the denominator 78,730,353 shares
of common stock issued and outstanding, net of treasury shares, on July 31,
2007.
(3) Affiliates
of Canpartners Investment IV LLC (“Canpartners”) are the beneficial holders of
various of the Company’s securities, including shares of our common stock, our
floating rate senior notes due 2014 and our 10.75% senior notes due 2016.
Affiliates of Canpartners also serve as lenders under our Senior Secured Credit
Facility, including our term loan facility, which matures in 2013, and our
Tranche A letter of credit facility, which matures in 2012, and, in each case,
receive customary fees in connection therewith.
(4) Information
concerning other Warrant Selling Securityholders will be set forth in additional
prospectus supplements if and when necessary. Totals in these columns may exceed
the number of Warrants and common stock offered by the Prospectus as a result
of
the Warrant Selling Securityholders identified above having sold, transferred
or
otherwise disposed of some or all of their Warrants since the date on which
the
information in the preceding table was provided to us without informing us
of
such sale(s). In no event will the number of Warrants offered by the Prospectus
exceed 10,000,000. Similarly, the total number of shares of our common stock
issuable upon the exercise of all the Warrants may increase or decrease due
to
adjustments to the exercise price and the number of shares issuable upon
exercise of the Warrants. Pursuant to Rule 416 under the Securities Act, the
registration statement of which the Prospectus forms a part also covers any
additional shares of our common stock which become issuable in connection with
the Warrants because of any stock dividend, stock split, recapitalization or
other similar event or adjustment in the number of shares issuable upon exercise
of the Warrants.
(5) Assumes
that all other holders of the Warrants (and future transferees, distributees,
pledgees, donees or successors of such holders) do not beneficially own any
shares of our common stock.