HOUSTON, TX and TORONTO, Oct. 16 /CNW/ - Northstar Healthcare Inc.
(TSX:NHC) announced today that it has completed the acquisition of an option
to acquire a 60% interest in The Palladium for Surgery - Dallas, a growing
ambulatory surgical centre in Dallas, Texas. Northstar had previously
announced on September 12, 2007 that it had entered into a letter of intent
with Palladium-Dallas' current partners to acquire the option.
Under the terms of the option, Northstar has the right to acquire a 60%
interest in Palladium-Dallas at a price equal to six times the EBITDA earned
by the ambulatory surgery centre in the twelve months prior to the date of
exercise. This price is consistent with the terms under which Northstar
acquired the interests in its initial ambulatory surgical centres at the time
of the Company's initial public offering (IPO).
"The acquisition of this purchase option represents a great opportunity
to expand Northstar's owned ambulatory surgical centre operations," said Dr.
Donald Kramer, Chief Executive Officer of Northstar. "Our executive team has
been managing Palladium-Dallas for almost two years, so we know both the
centre and the Dallas market dynamics."
In consideration for the option, Northstar has agreed to reduce the
management fees it receives from Palladium-Dallas from 10% to 5.5% over the
term of the option, when certain prescribed conditions are met. The reduction
in revenue is not considered material to Northstar's annual revenue or
Northstar, which completed its IPO on May 17, 2007, has indicated that a
key part of its long-term growth strategy is to acquire and integrate
additional ambulatory surgical centres in major urban markets, while
maintaining the Company's attractive dividend structure for shareholders. The
Company believes that it can significantly reduce the risk associated with
acquisitions by acquiring options that allow Northstar to manage the centres
prior to making a final decision on acquiring them.
Palladium-Dallas has 27 surgeons with staff privileges, including
specialties in pain management, ENT (ear, nose and throat), podiatry,
orthopedics and general surgery. Donald Kramer, Northstar's CEO, and certain
other members of management currently own 100% of Palladium-Dallas. The
acquisition of the option has been reviewed and approved by all of Northstar's
About Northstar Healthcare Inc.
Northstar owns and/or manages ambulatory surgery centres in the United
States, focusing initially on Houston and other metropolitan areas in Texas.
The Company currently holds interests in two ambulatory surgery centres in
Houston - a 70% partnership interest in The Palladium for Surgery - Houston
and a 60% partnership interest in Medical Ambulatory Surgical Suites. In
addition, Northstar manages an ambulatory surgery centre in Dallas and three
pain management clinics in Houston.
This press release may contain forward-looking statements (within the
meaning of applicable securities laws) relating to business of Northstar
Healthcare Inc. (the "Company") and the environment in which it operates.
Forward-looking statements are identified by words such as "believe",
"anticipate", "expect", "intend", "plan", "will", "may" and other similar
expressions. These statements are based on the Company's expectations,
estimates, forecasts and projections. They are not guarantees of future
performance and involve risks and uncertainties that are difficult to control
or predict. These risks and uncertainties are discussed in the Company's
regulatory filings available on the Company's web site at
www.Northstar-Healthcare.com or at www.sedar.com. There can be no assurance
that forward-looking statements will prove to be accurate as actual outcomes
and results may differ materially from those expressed in these
forward-looking statements. Readers, therefore, should not place undue
reliance on any such forward-looking statements. Further, a forward-looking
statement speaks only as of the date on which such statement is made. The
Company undertakes no obligation to publicly update any such statement or to
reflect new information or the occurrence of future events or circumstances.
Northstar was founded and sponsored by Donald Kramer, M.D., its Chief
Executive Officer, and Stewart A. Feldman. Mr. Feldman also served as the
co-principal in and Chairman and Chief Executive Officer of Healthcare
Ventures, Ltd., which sponsored Northstar, with Dr. Kramer serving as its
For further information:
For further information: Philip Koven, Tel: (416) 447-4740 Ext 235,