MedCath Selling Arizona Facility - Analyst Blog
August 31 2011 - 9:53AM
Zacks
Heath care services provider MedCath
Corporation (MDTH) has inked a definitive deal to jettison
substantially all the assets of its Kingman,
Arizona-based Hualapai Mountain Medical Center (“HMMC”) to Kingman
Regional Medical Center (“KRMC”). The sale also includes 18.6 acres
of adjacent undeveloped land.
MedCath noted that it will close the 70-bed facility by
September 30, subject to regulatory requirements. The
transaction is subject to the approval of MedCath shareholders and
other customary closing conditions. MedCath will hold a special
meeting of stockholders on September 22. The company expects to
book total net proceeds of roughly $42 million from the
divestiture.
MedCath stated that it has notified the employees at HMMC about
the sale and they are being given
termination notice. The company will offer severance to the
eligible employees if they are not hired by KRMC.
KRMC, for its part, has stated that it will re-open HMMC in a
limited capacity and plans to offer employment to the terminated
employees based on local patient demand for hospital
services.
MedCath provides high acuity health care services and operates 4
hospitals with a total of 366 licensed beds. It owns and operates
specialty hospitals that provide diagnosis and treatment of
cardiovascular diseases.
This divestiture of HMMC is MedCath’s tenth transaction since
the formation of a “Strategic Options Committee” in March 2010 to
consider the sale either of the entire company or its assets. The
company has already sold hospitals in Arkansas, New Mexico, South
Dakota and Texas.
MedCath, on August 1, 2011, completed the sale of its equity
interest in Arkansas Heart Hospital and divested substantially all
the assets of Heart Hospital of New Mexico. Results of these
entities were included in its recently released third-quarter
fiscal 2011 earnings report.
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