MedCath Announces Completion Of Sale Of Heart Hospital Of New Mexico To Lovelace Health System, Inc.
CHARLOTTE, N.C., Aug. 1, 2011 /PRNewswire/ -- MedCath Corporation (Nasdaq: MDTH) and Lovelace Health System, Inc. jointly announced today the completion of sale of substantially all the assets of MedCath's Heart Hospital of New Mexico to Lovelace, which is an affiliate of Ardent Health Services, based in Nashville, Tenn. The transaction was announced in May and was subject to MedCath stockholder approval, regulatory approval and other customary closing conditions listed in the Asset Purchase Agreement. Navigant Capital Advisors provided advisory services to MedCath related to the transaction.
Together with the sale of its equity interest in Arkansas Heart Hospital also announced today, MedCath has completed nine transactions since announcing in March 2010 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 four hospitals: Arizona Heart Hospital, Avera Heart Hospital of South Dakota, Heart Hospital of Austin and TexSan Heart Hospital. In addition, MedCath's Partners division sold its minority interest it held in Southwest Arizona Heart and Vascular, LLC in November, and in May, it completed the sale of its ownership interest and management agreement in Coastal Carolina Heart, as well as the sale of the majority of its assets to DLP Healthcare, a joint venture of LifePoint Hospitals and Duke University Health System.
When the Heart Hospital of New Mexico opened in October 1999, it became the state's first hospital dedicated to the prevention and treatment of heart disease. It's been ranked among the top five percent nationwide in patient experience by Health Grades, the leading independent health care ratings organization. It's also the state's only hospital to receive a five-star rating from Health Grades for Treatment of Heart Attack, it's recognized as an accredited Chest Pain Center and it's been designated by Blue Cross Blue Shield of New Mexico as a Blue Distinction Center for Cardiac Care.
"Heart Hospital of New Mexico resulted from the shared vision of two talented cardiovascular physicians groups that pioneered New Mexico's leading heart programs," said O. Edwin French, MedCath's president and CEO. "We are very proud of how that vision became reality, and we know that Lovelace Health Systems will continue that legacy. We wish them continued success."The transaction values the Heart Hospital of New Mexico's assets at $119.0 million. The limited liability company that currently owns Heart Hospital of New Mexico, of which 74.8% is owned by MedCath, will retain its net working capital. MedCath anticipates receiving approximately $62.0 million in net proceeds from the transaction, including its share of Heart Hospital of New Mexico's cash, and after collection of all accounts receivable, payment of all known liabilities, including taxes, and repayment of inter-company debt owed by Heart Hospital of New Mexico to MedCath, pro-rata minority interest payments and an allocation of additional funds to the limited liability company's minority partners by MedCath in consideration for such minority partners' consent to the transaction that was required under the limited liability company's Operating Agreement as a condition to entering into this transaction. The anticipated net proceeds do not include any reserves for unknown or contingent liabilities retained by Heart Hospital of New Mexico, including without limitation any liability which may arise from the New Mexico ICD investigation. "The medical staff and nurses of the Heart Hospital of New Mexico have a strong reputation for exceptional clinical quality and high patient satisfaction," said Ron Stern, president and CEO of Lovelace Health System. "We will build on that success and increase access to the Heart Hospital to more people in Albuquerque and New Mexico." 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 four hospitals with a total of 366 licensed beds, located in Arizona, California, Louisiana and Texas. SOURCE MedCath Corporation
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