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