TORONTO, Sept. 23, 2016 /CNW/ - Medical Facilities Corporation ("Medical Facilities" or the "Company") (TSX: DR), today announced that it has closed its previously announced transaction to acquire, in stages, an indirect 83 percent interest in Unity Medical and Surgical Hospital ("Unity"), a physician-owned medical and surgical hospital located in Mishawaka, Indiana. The signing of a letter of intent to acquire the hospital and the acquisition of the underlying real estate was announced in a press release dated July 15, 2016.
Unity Medical and Surgical Hospital is a 50,000 square foot, 29-bed Medicare-certified facility with four surgical and two special procedure suites focused on providing orthopedic, ophthalmology, podiatry, pain management, and spine surgery. It is one of the top performing hospitals in the U.S. with service scores in the top five percent, as determined by a national survey of patient care conducted by HCAHPS on behalf of the Centers for Medicare & Medicaid Services, released in July 2016.
"We are very pleased to have added a strong performer to our existing hospital portfolio," said Britt T. Reynolds, CEO of Medical Facilities. "Unity is a leading hospital in its community, with a skilled physician team combined with a strong commitment to patient care and satisfaction. This transaction is aligned with our growth strategy and we will continue to look for similar attractive assets with value creation potential."
As stated in the release of July 15, 2016, the hospital's operations are 86 percent owned by Physicians ASC Management ("PAM"). Under the terms of the agreement, the Company will purchase a 72 percent interest in PAM (representing an indirect 62 percent ownership interest in the hospital) for $26.63 million, and all but four percent of the remaining ownership interest in PAM can be purchased over three years (2017, 2018 and 2019, on the annual anniversaries of the initial closing) at a price determined by the fair market value of the hospital, calculated at the end of the prior calendar year. The remaining ownership (both directly in Unity and through PAM) will be held by practicing physicians at Unity. The transaction has been approved by the respective boards of the Corporation and Unity and is accretive to Medical Facilities.
"We are proud of the progress we have made in building a quality facility focused on patient satisfaction and positive outcomes," added John Day, CEO of Unity. "With Medical Facilities, we have found a partner whose vision is aligned with ours, who respects the role of our practicing physicians and who is able to take us to a new level of operational excellence."
About Medical Facilities
Medical Facilities owns controlling interests in five specialty surgical hospitals located in Arkansas, Indiana, Oklahoma and South Dakota, as well as an ambulatory surgery center in California. The specialty hospitals perform scheduled surgical, imaging, diagnostic and other procedures, including urgent and primary 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. In addition, Medical Facilities owns controlling interest in a diversified healthcare service company located in Oklahoma City that provides third-party business solutions to healthcare entities such as physician practices, facilities, and insurance companies. 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 dividends. For more information, please visit www.medicalfacilitiescorp.ca.
Caution concerning forward-looking statements
Statements made in this news release, other than those concerning historical financial information, may be forward-looking and therefore subject to various risks and uncertainties. Some forward-looking statements may be identified by words like "may", "will", "anticipate", "estimate", "expect", "intend", or "continue" or the negative thereof or similar variations. Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements. Factors that could cause results to vary include those identified in Medical Facilities' filings with Canadian securities regulatory authorities such as legislative or regulatory developments, intensifying competition, technological change and general economic conditions. All forward-looking statements presented herein should be considered in conjunction with such filings. Medical Facilities does not undertake to update any forward-looking statements; such statements speak only as of the date made.
SOURCE Medical Facilities Corporation
For further information: Britt T. Reynolds, Chief Executive Officer, Medical Facilities Corporation, 615.732.6052, [email protected]; Craig MacPhail, Investor Relations, NATIONAL Equicom, 416.586.1938, [email protected]