MedCath Announces Completion Of Sale Of TexSan Heart Hospital
CHARLOTTE, N.C., Jan. 3, 2011 /PRNewswire/ -- MedCath Corporation (Nasdaq: MDTH) announced today the completion of the sale of substantially all the assets of TexSan Heart Hospital, owned by MedCath and its physician investors, to Methodist Healthcare System of San Antonio. The transaction, which was announced in November, and was subject to customary closing conditions and regulatory requirements, was completed effective December 31, 2010.
This is MedCath's fifth completed transaction since announcing in March it had formed a Strategic Options Committee to consider the sale either of the entire company or its assets. Since October, MedCath has announced the completion of sales involving the following hospitals: Arizona Heart Hospital, Avera Heart Hospital of South Dakota and Heart Hospital of Austin. In addition, MedCath's Partners division sold its minority interest it held in Southwest Arizona Heart and Vascular, LLC in November.
Since opening in 2004, the TexSan Heart Hospital repeatedly distinguished itself with the quality care provided at the hospital. In 2009, the hospital received an Excellence Award from HealthGrades, the leading independent health care ratings organization. It was cited for being among the leading hospitals in America by Consumers' Checkbook survey, according to the May/ June 2009 issue of AARP The Magazine. In September, it became one of approximately 400 facilities nationwide to be recognized by Blue Cross and Blue Shield as a Blue Distinction Center for Cardiac Care®, due to its commitment to quality care. And earlier this year, it was named an American Society for Metabolic and Bariatric Surgery (ASMBS) Bariatric Surgery Center of Excellence®.
"MedCath is thankful to the local physicians who had the vision to bring world-class heart care to San Antonio and southwest Texas, and will always be proud of how it helped make that vision a reality," said O. Edwin French, MedCath's president and CEO. "Methodist Healthcare System brings together many of San Antonio's most respected health care facilities. We know the new owners will continue to serve the community well, and we wish them continued success."Under terms of the transaction, MedCath sold substantially all of the assets of TexSan Heart Hospital for a purchase price equal to approximately $78.5 million, plus retention of working capital. MedCath anticipates it will receive approximately $58.0 million in cash from the transaction after payment of retained liabilities, closing costs, taxes, liquidation of retained working capital and acquisition of the partnership's minority investors' ownership in accordance with the terms of an agreement entered into between MedCath and the minority partners of TexSan. That agreement granted MedCath the right and authority to unilaterally enter into and complete the transaction in exchange for MedCath's agreement to purchase the partnership interests of its minority partners for a purchase price equal to the net amount of the minority partners' unreturned capital contributions adjusted upward to the extent such partners' proportionate share of net proceeds from the sale exceed their unreturned capital. Beginning with its first quarter of fiscal 2011, which ended December 31, 2010, MedCath will account for TexSan Heart Hospital as a discontinued operation for current and prior reporting periods. Navigant Capital Advisors, who was retained by MedCath to provide advisory services relative to assessment of MedCath's strategic alternatives, provided advisory services on the transaction. The approximately $58.0 million in cash that MedCath anticipates receiving from this sale does not reflect unknown liabilities, if any, that relate to the pre-closing period that remain the responsibility of the limited partnership that owned TexSan Heart Hospital. About MedCath MedCath Corporation, headquartered in Charlotte, N.C., is a health care provider focused on high acuity services with the diagnosis and treatment of cardiovascular disease being a primary service offering. MedCath owns an interest in and operates six hospitals with a total of 533 licensed beds, located in Arizona, Arkansas, California, Louisiana, New Mexico and Texas. In addition, MedCath and its subsidiary MedCath Partners provide services in diagnostic and therapeutic facilities. Parts of this announcement contain forward-looking statements that involve risks and uncertainties, including those relating to the amount of cash proceeds MedCath may receive from the sale of substantially all of the assets TexSan Heart Hospital and potential unknown liabilities associated with the pre-closing period that will remain the responsibility of the MedCath subsidiary that owned TexSan Heart Hospital. Although MedCath's management believes that these forward-looking statements are based on reasonable assumptions, these assumptions are inherently subject to various risks that are difficult or impossible to predict accurately and, in some cases, are beyond MedCath's control. Actual results could differ materially from those projected in these forward-looking statements. MedCath assumes no obligation to update these statements in a news release or otherwise should material facts or circumstances change in ways that would affect their accuracy. SOURCE MedCath Corporation
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