TORONTO, ON and Houston, TX, Jan. 11 /CNW/ - Northstar Healthcare Inc.
(TSX:NHC) today announced the board of directors has approved the
acquisition of The Palladium for Surgery - Dallas Ltd. ("Palladium
Dallas") from the Company's founder and Chief Executive Officer, Dr.
Donald Kramer and Dr. James Vu. Dr. Kramer owns 95% of Palladium Dallas
and Dr. Vu owns the remaining 5%. Northstar managed Palladium Dallas
from May 2007 until December 31, 2009.
The acquisition enables Northstar to complete three important
Align Dr. Kramer's interests with those of the company,
Increase revenues and profitability,
Have a foothold into the Dallas market which may allow Northstar to
identify further growth opportunities.
On November 1, 2010, Palladium Dallas entered into a joint venture
relationship with a group of six physician partners to provide surgical
services in the Palladium Dallas facility. This venture, MicroSurgery
Institute of Dallas ("MSI Dallas"), will be owned 25% by Northstar and
75% by the physicians. In November 2010, there were 131 surgical cases
performed at MSI Dallas. In December 2010, there were 215 cases
performed at MSI Dallas. This shows substantial growth from the average
65 cases per month performed at Palladium Dallas from January 2010
through October 2010, which was prior to the initiation of this new
venture. Historically, Palladium Dallas has needed 57 cases to
breakeven on a monthly basis. Northstar will manage MSI Dallas for its
standard 5.5% of center collections.
The purchase price for Palladium Dallas, as determined by an independent
valuation firm, was $2.2 million. Northstar will finance its purchase
with a commercial bank loan. Dr. Kramer has indicated his willingness
to personally guarantee the note.
Additionally, Northstar acquired Dr. Kramer's 18.2% interest in The
Palladium for Surgery - Houston, Ltd. ("Palladium Houston") for an
independently valued price of $0.2 million. This acquisition increases
Northstar's ownership in Palladium Houston to 91%. Similar to terms and
structure to Palladium Dallas, Palladium Houston has entered into a
joint venture with eight physicians forming the MicroSurgery Institute
of Houston. An active program has been put in place to attract
additional physicians to both partnerships.
"The acquisition of Palladium Dallas fulfills one of our goals stated in
the Q3 2010 MD&A," said Dr. Kramer. Dr. Kramer continued, "I believe
the sale of my equity in Palladium Dallas and Palladium Houston further
aligns my interests with those of the Company and its shareholders.
Based on the strong performance of MSI Dallas during its first two
months of operations, we believe this acquisition will be accretive to
Northstar. We continue to evaluate acquisition candidates as we move
About Northstar Healthcare Inc.
Northstar owns and manages ambulatory surgery centers in the United
States, focusing initially on metropolitan areas in Texas. The Company
holds interests in three ambulatory surgery centers, two in Houston and
the third in Dallas.
This news 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.
SOURCE Northstar Healthcare Inc.
For further information:
Tel: (713) 355-8614