CHARLOTTE, N.C., Oct. 4 /PRNewswire-FirstCall/ -- MedCath
Corporation (Nasdaq: MDTH) announced today the completion of sales
involving its interests in two hospitals, Arizona Heart Hospital
and Avera Heart Hospital of South
Dakota.
The sales mark MedCath's first completed transactions since it
announced the formation of a Strategic Options Committee in March
to consider the sale either of the entire company or its
assets.
Under terms of the Arizona Heart Hospital transaction, which was
announced Aug. 9, Vanguard Health
Systems assumed approximately $300,000 in capital leases and paid approximately
$32.0 million for certain of the
hospital assets, plus certain net working capital. The limited
liability company which has owned the Arizona Heart Hospital
retained all accounts receivable and the hospital's remaining
liabilities. Based on current asset and liability amounts, MedCath
anticipates that total net proceeds that it will receive from the
transaction, after payment of retained liabilities, collection of
accounts receivable and estimated closing costs and income tax,
will be approximately $31.5 million.
The final purchase price is subject to certain post-closing working
capital and other adjustments.
Under terms of the Avera Heart Hospital of South Dakota transaction, which was announced
Aug. 30, Avera McKennan purchased a MedCath subsidiary
which was the indirect owner of a one-third ownership interest and
which held management rights in Avera Heart Hospital of
South Dakota. Avera McKennan paid $20.0
million plus a percentage of available cash, which in the
aggregate is anticipated to net approximately $16.0 million to MedCath after closing costs and
estimated taxes. The final purchase price is subject to
post-closing working capital adjustments. Two-thirds of the
hospital is now owned by Avera
McKennan, a member of Avera Health, a regional health care
family of more than 235 facilities in South Dakota,
North Dakota, Minnesota, Iowa and Nebraska.
Both hospitals have received national acclaim, with each being
ranked for several years as one of the nation's 100 Top Hospitals®
for cardiovascular care by Thomson-Reuters.
Arizona Heart Hospital was also one of three MedCath hospitals
cited for being among the leading hospitals in America by
Consumers' Checkbook survey, according to the May/June 2009 issue of AARP The Magazine. And
recently HealthGrades, the leading independent health care ratings
organization, ranked Arizona Heart Hospital among the top 5 percent
of hospitals in the nation and No. 1 in Arizona for overall cardiac services and
vascular surgery.
Avera Heart Hospital of South
Dakota also became the region's first Accredited Chest Pain
Center, ranks in the top 2 percent in the nation for patient
experience and ranks in the top 5 percent in the nation for heart
attack mortality rate.
"These hospitals exemplify the MedCath model of patient-focused,
high quality care and they showed how working closely with our
physician partners, we fundamentally changed how cardiovascular
services were provided in these areas," said O. Edwin French, MedCath's president and CEO.
"We know the new owners will continue that legacy, and we wish them
continued success."
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 eight hospitals with
a total of 711 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 in various
states.
Parts of this announcement contain forward-looking statements
that involve risks and uncertainties, including estimated net
proceeds from the sale of two hospitals. Although MedCath's
management believes that these forward-looking statements are based
on reasonable assumptions, these assumptions are inherently subject
to various risks, including obtaining required regulatory approvals
and satisfaction of other closing conditions, 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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