TORONTO, Nov. 14,
2024 /CNW/ - Medical Facilities Corporation
("MFC" or the "Corporation") (TSX: DR), announced that one of MFC's
specialty surgical hospitals, Black Hills Surgical Hospital, LLP
("BHSH"), located in Rapid City,
SD, has entered into a definitive agreement to sell BHSH to
Sanford Health (with certain affiliates, "Sanford"). The proposed
transaction is structured as a merger in which Sanford would
acquire 100% of the equity securities of BHSH for a total purchase
price of $194 million, subject to
customary purchase price adjustments (the "Transaction"). The
Transaction is expected to yield gross proceeds of approximately
$105.2 million for MFC's 54.22%
ownership share of BHSH. MFC's minority partner in BHSH, Black
Hills Surgical Physicians, LLC, is also participating in the
Transaction. The Transaction is expected to close within the week.
All amounts are expressed in U.S. dollars.
"The sale of Black Hills Surgical Hospital will be effected at a
material premium to current trading levels and unlock significant
value for Medical Facilities' shareholders," said Jason Redman, President and CEO of MFC. "This
transaction aligns with our strategic direction, allowing us to
better focus on our remaining core assets, and continue delivering
high-quality healthcare services in our key markets. Additionally,
the sale strengthens our balance sheet and should provide us with
the flexibility to continue creating value for our
shareholders."
Michael Gisser, Chairman of the
board of directors of MFC noted, "We are proud to have played a
role in building BHSH into one of the top orthopedic hospitals in
the United States. In particular,
it has been an honour to partner with the exceptional professionals
at BHSH over the years. Their staff and surgeons are indeed second
to none."
For the most recent fiscal year ended December 31, 2023, BHSH generated revenue of
$106 million and income from
operations of $17.9 million,
representing 23.8% and 26.7% of MFC's consolidated facility service
revenue and income from operations, respectively.
The Corporation is currently evaluating various alternatives for
the majority of the anticipated net proceeds, including
repurchasing shares under the Corporation's normal course issuer
bid, making a substantial issuer bid, and/or making distributions
to shareholders.
About Medical Facilities
Medical Facilities, in partnership with physicians, owns a
portfolio of highly rated, high-quality surgical facilities in
the United States. MFC's ownership
includes controlling interests in three specialty surgical
hospitals located in Arkansas,
Oklahoma, and South Dakota, and an ambulatory surgery center
("ASC") located in California. The
specialty surgical hospitals perform scheduled surgical, imaging,
diagnostic and other procedures, including primary and urgent care,
and derive their revenue from the fees charged for the use of their
facilities. The ASC specializes in outpatient surgical procedures,
with patient stays of less than 24 hours. For more information,
please visit www.medicalfacilitiescorp.ca.
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 and
include statements about the Company's normal course issuer bid and
any future transactions. 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.
SOURCE Medical Facilities Corporation
