Medical Facilities Corporation Announces Sale of Black Hills Surgical Hospital, LLP
Canada NewsWire
TORONTO, Nov. 14, 2024
TORONTO, Nov. 14, 2024 /CNW/ - Medical Facilities Corporation ("MFC" or the "Corporation") (TSX: DR), announced that one of MFC's specialty surgical hospitals, Black Hills Surgical Hospital, LLP ("BHSH"), located in Rapid City, SD, has entered into a definitive agreement to sell BHSH to Sanford Health (with certain affiliates, "Sanford"). The proposed transaction is structured as a merger in which Sanford would acquire 100% of the equity securities of BHSH for a total purchase price of $194 million, subject to customary purchase price adjustments (the "Transaction"). The Transaction is expected to yield gross proceeds of approximately $105.2 million for MFC's 54.22% ownership share of BHSH. MFC's minority partner in BHSH, Black Hills Surgical Physicians, LLC, is also participating in the Transaction. The Transaction is expected to close within the week. All amounts are expressed in U.S. dollars.
"The sale of Black Hills Surgical Hospital will be effected at a material premium to current trading levels and unlock significant value for Medical Facilities' shareholders," said Jason Redman, President and CEO of MFC. "This transaction aligns with our strategic direction, allowing us to better focus on our remaining core assets, and continue delivering high-quality healthcare services in our key markets. Additionally, the sale strengthens our balance sheet and should provide us with the flexibility to continue creating value for our shareholders."
Michael Gisser, Chairman of the board of directors of MFC noted, "We are proud to have played a role in building BHSH into one of the top orthopedic hospitals in the United States. In particular, it has been an honour to partner with the exceptional professionals at BHSH over the years. Their staff and surgeons are indeed second to none."
For the most recent fiscal year ended December 31, 2023, BHSH generated revenue of $106 million and income from operations of $17.9 million, representing 23.8% and 26.7% of MFC's consolidated facility service revenue and income from operations, respectively.
The Corporation is currently evaluating various alternatives for the majority of the anticipated net proceeds, including repurchasing shares under the Corporation's normal course issuer bid, making a substantial issuer bid, and/or making distributions to shareholders.
About Medical Facilities
Medical Facilities, in partnership with physicians, owns a portfolio of highly rated, high-quality surgical facilities in the United States. MFC's ownership includes controlling interests in three specialty surgical hospitals located in Arkansas, Oklahoma, and South Dakota, and an ambulatory surgery center ("ASC") located in California. The specialty surgical 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 ASC specializes in outpatient surgical procedures, with patient stays of less than 24 hours. 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 and include statements about the Company's normal course issuer bid and any future transactions. 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
View original content: http://www.newswire.ca/en/releases/archive/November2024/14/c5454.html
/CONTACT:
For further information, please contact: David Watson, Chief Financial Officer, Medical Facilities Corporation, 615.721.2290, investors@medicalfc.com; Trevor Heisler, Vice President, MBC Capital Markets, Advisors, 416.848.7380, theisler@maisonbrison.com
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November 14, 2024 07:00 ET (12:00 GMT)
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