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Rescare (RSCR) Receives Acquisition Proposal From Onex Corporation

LOUISVILLE, Ky., Aug. 16, 2010 (GLOBE NEWSWIRE) — ResCare, Inc. (Nasdaq:RSCR – News) announced today that it has received a proposal from Onex Corporation (“Onex”) to acquire all of the outstanding shares of common stock of ResCare not owned by affiliates of Onex for $12.60 per share. The written proposal, which includes several terms and conditions, is attached to this release.

Affiliates of Onex, the Toronto-based investment firm, currently hold common stock and preferred stock of ResCare representing 24.9% of the voting power of ResCare stock. The preferred stock held by Onex votes on an as-converted basis with common stock. Onex acquired its position in ResCare in 2004.

The board of directors of ResCare has formed a special committee of independent directors to evaluate the offer with the committee’s independent financial and legal advisors. The members of the committee are;

Ronald G. Geary, current Chairman of the Board and ResCare CEO until 2006;
James H. Bloem, Chief Financial Officer of Humana, Inc.;
Olivia F. Kirtley, ResCare audit committee chair; and
Steven S. Reed, former U.S. attorney and former Chair of the Board of Trustees of the University of Kentucky.

The special committee has engaged Goldman Sachs & Co. to serve as its financial advisor and Frost Brown Todd LLC as its legal counsel.

The board of directors cautions ResCare’s shareholders that no decisions have been made by the board with respect to a response to the proposal. There can be no assurance that any agreement will be executed or that this or any other transaction will be approved or consummated. Pending completion of the evaluation of the proposal by the special committee and the board of directors, neither ResCare nor the special committee will have any further comment with respect to the proposal.

From time to time, ResCare makes forward-looking statements in its public disclosures, including statements relating to expected financial results, revenues that might be expected from new or acquired programs and facilities, its development and acquisition activities, reimbursement under federal and state programs, financing plans, compliance with debt covenants and other risk factors, and various trends favoring privatization of government programs. In ResCare’s filings under the federal securities laws, including its annual, periodic and current reports, the Company identifies important factors that could cause its actual results to differ materially from those anticipated in forward-looking statements. Please refer to the discussion of those factors in the Company’s filed reports. Statements related to expected financial results are as of this date only, and ResCare does not assume any responsibility to update these statements.

Onex Corporation

161 Bay Street

Toronto, Ontario M5J 2S1


August 14, 2010

Board of Directors

Res-Care, Inc.

9901 Linn Station Road

Louisville, KY 40223


We are writing to set forth our proposal for a transaction in which a newly formed affiliate of Onex Corporation would acquire all of the outstanding shares of common stock, no par value, of ResCare, Inc. (the “Company”) not owned by our affiliates for a price of $12.60 per share (the “Transaction”). Our proposal is subject to the approval of the Board of Directors of the Company, participation in the investment by key members of the Company’s management, the negotiation, execution and delivery of a mutually satisfactory definitive agreement providing for the Transaction and the satisfaction of the conditions to be set forth therein.

The definitive agreement for the Transaction would provide for a “go-shop” period of 30 days during which the Company could solicit alternative offers, and a termination fee equal to 3% of the fully-diluted equity of the Company valued at the higher of our offer price or the price to be paid in an alternative transaction, which would be payable by the Company if the Board of Directors chose to support an alternative transaction and under other customary circumstances. We contemplate a financing structure with debt not exceeding 3.5x EBITDA upon consummation of the Transaction and that the definitive agreement for the Transaction would not be subject to a financing condition.

We look forward to working with you and your advisors with a view to achieving a definitive agreement as soon as practicable. This proposal will expire if a definitive agreement for the Transaction is not entered into on or before September 1, 2010.

Very truly yours,

Onex Corporation

Monday, August 16th, 2010 Uncategorized
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