CHARLOTTE, N.C., May 5, 2011 /PRNewswire/ -- MedCath Corporation
(Nasdaq: MDTH) announced today it has completed the sale of the
majority of the assets of its MedCath Partners division to DLP
Healthcare, a joint venture of LifePoint Hospitals and Duke University Health System.
The transaction valued the assets acquired at $25.0 million and involved the sale of certain
North Carolina-based assets
related to the operation of cardiac catheterization laboratories in
North Carolina. MedCath will
retain working capital related to the assets sold and will also
retain assets related to cath labs leased to two health care
systems outside of North Carolina
as well as its minority ownership in one North Carolina joint venture. Further,
MedCath will retain certain assets and liabilities arising from
this business that arose before closing.
"MedCath Partners has been an integral component of MedCath
since the inception of MedCath in 1988," said O. Edwin French, MedCath's president and chief
executive officer. "We're proud of MedCath Partners' history of
helping provide cardiovascular care in partnership with physicians
and hospitals, and we wish the buyer of this portion of the
division the best in its endeavors."
MedCath anticipates that it will receive approximately
$16.0 million from the transaction,
after collection of related retained accounts receivable and
payment of known liabilities, closing costs and taxes. MedCath
intends to use the net proceeds, along with available cash, to
repay all outstanding amounts owed under its bank facility and
terminate the facility, which matures in November 2011. As of March
31, 2011, MedCath owed $30.2
million in borrowings under the facility.
About MedCath
MedCath Corporation, headquartered in Charlotte, N.C., is a healthcare 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.
Parts of this announcement contain forward-looking statements
that involve risks and uncertainties, including those relating to
the sale of certain assets of our MedCath Partners division, the
amount of cash proceeds MedCath may receive from the sale of the
MedCath Partners assets, the use of those proceeds and potential
unknown liabilities associated with the pre-closing period that
will remain the responsibility of the MedCath subsidiary that owned
such assets. 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