In another clear indication of the slumping economy, MBF Healthcare Acquisition, a Coral Gables company headed by entrepreneur Mike Fernandez, announced Monday its $420 million deal to purchase a Pennsylvania company had been canceled.

MBF, which is a so-called blank-check company, had announced in February that it planned to purchase Critical Homecare Solutions Holdings, a privately held company that provides home infusion therapy and other infusion services.

Monday afternoon, executives said the deal -- which would something like an initial public offering of stock -- was killed off by the slumping stock market.

''Market conditions are just terrible,'' said Jorge Rico, chief operating officer of MBF Healthcare Acquisition. ``In essence, what we would have been doing was going out to raise equity and no one wants to do that right now.''

''It was really based on market conditions,'' Critical Homecare President Bob Cucuel said in a mid-day telephone interview. ''The financing was in place. But in the last 11 or 12 weeks, there hasn't been an IPO [initial public offering]. It's just not the time to launch a road show,'' to get investors excited about the deal.

Blank check companies are devices in which investors put money with a veteran entrepreneur in the belief that he will come up with a deal that will make them all money. They were popular in the past several years when the stock market was bullish, but few have started in the past few weeks as the market and economy has been in a severe down slide.

Fernandez has a long record as a healthcare executive and in 2005 sold CarePlus Partners, a Medicare HMO, to Humana for $465 million. Since then, he's operated a venture capital fund, MBF Healthcare Partners, which has raised at least $200 million to invest in various businesses, including Navarro Discount Pharmacies.

Blank check companies essentially have a two-stage initial public offering -- the first when money is raised for the entrepreneur and then a second when he has selected a company and wants to close the deal, merging the firms into a new publicly traded entity.

MBF Healthcare Acquisition, a separate entity from MBF Healthcare Partners, was created in April 2007, with investors putting about $150 million into the company at a share price of $8. The resulting trust has until April 17, 2009, to complete a deal or give the money raised back to the investors.

In a filing with the Securities and Exchange Commission on Oct. 20, the company said that if the deal with Critical Homecare was not done, ``MBF will have insufficient time and resources to look for another suitable acquisition target and will most likely have to liquidate the trust in accordance with the terms of its . . . incorporation.''

However, on Monday, Rico said the company had not decided what to do. ``We're weighing all our options with our advisors.''

SEC filings seem to indicate that the cash the company is holding in treasury bills is worth $8.20 a share. The stock on Monday was listed as $7.79. Rico said there was no breakup fee for the deal.

In three filings with the Securities and Exchange Commission last month, the Coral Gables company, which trades on the American Stock Exchange as MBH, offered detailed proposals on its plan to complete the deal. On Oct. 20, MBF said the closing would include debt financing of $209 million ``for which we have received a commitment from CIT Bank, CIT Healthcare and Jefferies Finance LLC.''

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