Northstar Healthcare acquires option to expand ambulatory surgical centre operations

    Acquires option to purchase 60% of The Palladium for Surgery - Dallas

    Houston, TX and TORONTO, Sept. 12 /CNW/ - Northstar Healthcare Inc.
(TSX:NHC) announced today that it has signed a Letter of Intent (LOI), under
which the Company will receive an option to acquire a 60% interest in The
Palladium for Surgery - Dallas, an ambulatory surgical centre currently
managed by Northstar.
    Under terms of the option, Northstar will have the right to acquire the
60% interest at a price equal to six times the EBITDA earned by
Palladium-Dallas in the twelve months prior to the date of exercise. This
price is consistent with the terms under which Northstar acquired its initial
ambulatory surgical centres at the time of the Company's initial public
offering (IPO).
    "This agreement represents a great opportunity for us to expand
Northstar's owned ASC operations, while minimizing our acquisition risk," said
Dr. Donald Kramer, Chief Executive Officer of Northstar. "Our executive team
has been managing Palladium-Dallas for almost two years, so we know the centre
well and also have a strong understanding of its growth potential in the
strong Dallas market."
    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
acquisition of this option is consistent with this strategic objective.
    In exchange 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 financial
    Palladium-Dallas has 27 surgeons with staff privileges, including
specialties in pain management, ENT (ear, nose and throat), podiatry,
orthopedics and general surgery. The Company anticipates that the option will
be exercised before December 31, 2008. 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 independent directors.

    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.

    Forward-looking statements
    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 or at 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

    %SEDAR: 00025141E

For further information:

For further information: Philip Koven, Tel: (416) 447-4740 Ext 235,

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