FRANKLIN, TN, Jan. 12, 2018 /CNW/ - Officials with Medical
Facilities Corporation ("Medical Facilities" or the "Company")
(TSX: DR), today announced an agreement with Kansas-based NueHealth LLC ("NueHealth") to
form a joint venture (the "Joint Venture") and acquire seven
ambulatory surgical centers from Meridian Surgical Partners of
Brentwood, Tenn ("Meridian").
The joint venture, called MFC Nueterra Holding Company, LLC,
will be majority-owned by Medical Facilities. Medical Facilities'
portion of the US$46.5 million total
purchase price will be funded by cash and a draw on its credit
facility. The parties expect to close on or before March 2018, subject to customary closing
conditions.
"NueHealth brings to this partnership significant national
experience operating surgical centers and working with physician
partners. Combining this expertise with our own skill at
identifying high-quality and well-valued surgical centers creates a
strong platform for growth," said Robert O.
Horrar, President and CEO of Medical Facilities. "These
initial seven surgical centers have an established presence in
their communities, skilled physicians and an attractive payor mix.
Through the joint venture, we have the ability to acquire
additional ambulatory surgery centers and build synergies
throughout the network."
Medical Facilities currently holds ownership interest in
specialty surgical hospitals and ambulatory surgical centers in
Arkansas, California, Indiana, Oklahoma and South
Dakota. Through this transaction, the joint venture will
acquire ownership interests in the following centers:
- Brookside Surgery Center (Battle
Creek, Mich.)
- Central Arkansas Surgical Center (Russellville, Ark.)
- City Place Surgery Center (Creve
Coeur, Mo.)
- Eastwind Surgical (Westerville,
Ohio)
- Miracle Hills Surgery Center (Omaha,
Neb.)
- Riverview Ambulatory Surgical Center (Kingston, Penn.)
- Two Rivers Surgery Center (Eugene,
Ore.)
The centers provide medical procedures including orthopedic
surgery, neurosurgery and pain management and combined have 26
operating/procedure rooms. For the 12 months ended September 30, 2017 the centers had net revenue of
US$35.6 million with
EBITDA1 margins in the mid-20's and are expected to be
immediately accretive to the Company's current operations.
In aggregate, the Joint Venture will own approximately 53
percent equity interest in the centers. NueHealth, through a
management services agreement with the Joint Venture, will provide
day-to-day management and operations support to the centers,
including accounting, materials management, payor contracting,
benefits administration and billing and collections.
"We are pleased to be working with Medical Facilities to provide
quality care to the patients in these communities," said Dan
Tasset, Chairman of NueHealth. "Both of us are sensitive to the
concerns of physician ownership groups and have experience helping
them achieve their goals while delivering shareholder value. We
look forward to extending this partnership further."
"I am excited about this opportunity for our employees and
physician partners," said John
Wilson, CEO of Meridian. "MFC and NueHealth offer a breadth
of capabilities to drive the future growth of our surgery
centers."
SOLIC Capital Advisors, LLC served as financial advisor to
Meridian in connection with the transaction.
About Medical Facilities
Medical Facilities owns
controlling interests in five specialty surgical hospitals located
in Arkansas, Indiana, Oklahoma and South
Dakota, as well as an ambulatory surgery center in
California. The specialty
hospitals perform scheduled surgical, imaging, diagnostic and other
procedures, including primary and urgent care. The ambulatory
surgery center specializes in outpatient surgical procedures, with
patient stays of less than 24 hours. In addition, Medical
Facilities owns controlling interest in a diversified healthcare
service company located in Oklahoma
City that provides third-party business solutions to
healthcare entities such as physician practices, facilities, and
insurance companies. Medical Facilities is structured so that a
majority of its free cash flow from operations is distributed to
the holders of its common shares in the form of dividends. For more
information, please visit www.medicalfacilitiescorp.ca.
About NueHealth
NueHealth, LLC, is a privately held
nationally trusted healthcare partner with more than 10,000
physicians and 25 health systems delivering approximately
$776 million of consolidated revenue
annually in 28 states. Our core business is comprehensive
outpatient surgical care. Our market development is concentrated in
four major regions, Mid-Atlantic, Florida, Texas and Mid-West. Since 1997, we have been
successfully developing joint ventures with more than 150
high-value sites of service supported by over 2500 associates,
including ASCs, MUVE™ hyper specialty joint replacement centers and
specialty surgical hospitals. Our efforts have helped stabilize
provider independence through wealth creation, ownership, and
increased referral volume while successfully guiding them through
the transition from fee for service to value based risk
contracting. NueHealth has developed the industry's most
comprehensive Ambulatory Center of Excellence platform that assists
payors, health systems and providers in delivering an appropriate
alternative to fee for service, high-cost care for fully insured
members and self-insured covered lives.
Caution concerning forward-looking statements
Statements made in this news release, other than those
concerning historical financial information, may be forward-looking
and therefore subject to various risks and uncertainties.
Some forward-looking statements may be identified by words like
"may", "will", "anticipate", "estimate", "expect", "intend", or
"continue" or the negative thereof or similar variations. Certain
material factors or assumptions are applied in making
forward-looking statements and actual results may differ materially
from those expressed or implied in such statements. Factors
that could cause results to vary include those identified in
Medical Facilities' filings with Canadian securities regulatory
authorities such as legislative or regulatory developments,
intensifying competition, technological change and general economic
conditions. All forward-looking statements presented herein
should be considered in conjunction with such filings.
Medical Facilities does not undertake to update any forward-looking
statements; such statements speak only as of the date made.
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1 EBITDA, is a non-IFRS financial measure. While Medical
Facilities believes that this measure is useful for the evaluation
and assessment of its performance, it does not have any standard
meaning prescribed by IFRS, is unlikely to be comparable to similar
measures presented by other issuers, and should not be considered
as an alternative to comparable measures determined in accordance
with IFRS. For further information on non-IFRS financial measures,
including a reconciliation of non-IFRS financial measures to the
most directly comparable measure calculated in accordance with
IFRS, please refer to Medical Facilities' most recently filed
management's discussion and analysis, available on SEDAR at
www.sedar.com.
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SOURCE Medical Facilities Corporation