Medical Facilities Corporation Announces Agreement to Acquire 51%
Interest in Arkansas Surgical Hospital L.L.C.
TORONTO,
Nov. 13, 2012 /CNW/ - Medical
Facilities Corporation ("Medical Facilities" or the "Corporation")
(TSX: DR) announced today that it has entered into a definitive
agreement to acquire a 51% interest in the Arkansas Surgical
Hospital, L.L.C. ("ASH"). ASH
operates the Arkansas Surgical
Hospital, a physician-owned specialty hospital located in
North Little Rock, Arkansas that
provides advanced medical and surgical treatment for patients
suffering from disorders of the spine and chronic pain.
The Corporation is acquiring its interest in ASH
for a purchase price of approximately US$36.2 million, subject to customary
adjustments. The current physician-owners of ASH will retain a 49%
interest (5% of which will be exchangeable for common shares of
Medical Facilities). The acquisition is scheduled to be completed
on November 30, 2012 after close of
business and is subject to customary closing conditions. The
transaction has been approved by the respective boards of the
Corporation and ASH and is accretive to the Corporation.
Dr. Donald
Schellpfeffer, the Chief Executive Officer of Medical
Facilities, said: "We are excited to add the Arkansas Surgical
Hospital to the Corporation's group of hospitals, which currently
includes a total of four (4) specialty surgical hospitals located
in South Dakota and Oklahoma, as well as an ambulatory surgery
center in California.
Arkansas Surgical Hospital is highly regarded for the quality of
its care and services. This transaction is consistent with our
stated strategy to grow distributable cash by identifying and
executing accretive acquisitions in what remains a highly
fragmented industry. The acquisition of ASH provides significant
diversification benefits and is immediately accretive to Medical
Facilities. We expect that this acquisition will help us build on
Medical Facilities' strong momentum."
TRANSACTION BENEFITS
The acquisition would provide the following key
benefits to Medical Facilities:
- ASH is a successful and growing specialty hospital, highly
regarded for the quality of its care and service and the talents of
its management, medical professionals and employees, consistent
with the profile and strengths of Medical Facilities' other
hospitals.
- Accretion of approximately 6% to free cash flow for the 12
months ended September 30, 2012
excluding any potential synergies that might be realized.
- Enhanced cash flow stability through a broadened geographic
footprint and diversification of payor base and case mix.
- Increased scale and expanded geographic scope will enhance the
Corporation's ability to identify and execute on future acquisition
opportunities by increasing its profile and through an expanded
network of physician contacts.
About Medical Facilities
Medical Facilities owns controlling interests in
four specialty surgical hospitals, located in South Dakota and Oklahoma, as well as an ambulatory surgery
center in California. The
specialty hospitals perform scheduled surgical, imaging, diagnostic
and other procedures, including primary and urgent care, and derive
their revenue from the fees charged for the use of their
facilities. The ambulatory surgery center specializes in outpatient
surgical procedures, with patient stays of less than 24 hours.
Medical Facilities is structured so that a majority of its free
cash flow from operations is distributed to the holders of its
common shares in the form of a monthly dividend. For more
information, please visit www.medicalfacilitiescorp.ca.
NON-IFRS MEASURES
Certain financial information contained in this
press release, including references to distributable cash and
EBITDA, are not standard measures under International Financial
Reporting Standards ("IFRS") in Canada and may not be comparable to similar
measures presented by other entities. These measures are considered
to be important measures used by the investment community to assess
the source and sustainability of the Corporation's cash
distributions and should be used to supplement other performance
measures prepared in accordance with IFRS. For further information
on non-IFRS financial measures used by the Corporation and a
reconciliation of such measures to IFRS financial measures, see the
annual and quarterly Management's Discussion and Analysis and the
notes to the annual and quarterly financial statements filed by the
Corporation with Canadian securities regulators.
FORWARD LOOKING STATEMENTS
Certain statements in this press release may
constitute "forward-looking" statements which involve known and
unknown risks, uncertainties and other factors which may cause
actual results, performance or achievements of the Corporation to
be materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. When used in this press release, such statements use
such words as "may," "will," "expect," "anticipate," "project,"
"believe," "plan" and other similar terminology. The risks and
uncertainties are detailed from time to time in reports filed by
the Corporation with the securities regulatory authorities in all
of the provinces and territories of Canada to which recipients of this press
release are referred for additional information concerning the
Corporation, its prospects and the risks and uncertainties relating
to the Corporation and its prospects. New risk factors may arise
from time to time and it is not possible for management to predict
all of those risk factors or the extent to which any factor or
combination of factors may cause actual results, performance and
achievements of the Corporation to be materially different from
those contained in forward-looking statements. Given these risks
and uncertainties, investors should not place undue reliance on
forward-looking statements as prediction of actual results. The
forward-looking information contained in this press release is
current only as of the date of this press release. There should not
be an expectation that such information will in all circumstances
be updated, supplemented or revised whether as a result of new
information, changing circumstances, future events or
otherwise.
SOURCE Medical Facilities Corporation